Sen. Richard C. Shelby and Federal Deposit Insurance Corp. Chairman Donna A. Tanoue are duking it out over the FDIC's participation at a community development conference.
In a testy letter, the Alabama Republican accused Ms. Tanoue of engaging in "political activism" by cosponsoring the National Community Reinvestment Coalition's annual parley two weeks ago. The event featured breakout sessions such as "How You and Your Bank Can Collaborate on an Effective Reinvestment Plan."
"How does the mission of the FDIC coincide with an advocacy group's effort to seek 'economic justice?'" wrote Sen. Shelby, the Senate Banking Committee's No. 2 Republican.
Quoting from a speech Ms. Tanoue made to the group, he asked her to cite the statutory authority she has to "serve as a 'broker' to 'rebuild neighborhoods.'"
Ms. Tanoue replied Thursday, explaining that as the primary federal regulator of 6,000 banks, the FDIC has a duty to ensure they meet their CRA and other fair-lending requirements. She said the agency's ethics office approved the cosponsorship, which Ms. Tanoue described as "an efficient way to educate and encourage financial institutions."
Apparently Sen. Phil Gramm is pondering his legacy.
Last week he said he fears lawmakers debating financial reform will lose sight of the big picture and get bogged down by controversial issues of the day, such as community reinvestment requirements.
"Someday I may have a grandchild who is studying economics somewhere and they may look at this bill, and it might be associated with me, and I don't want them to think their grandpa was some kind of dope," the Senate Banking Committee chairman said.
But President Clinton and fellow Democrats will try to keep Sen. Gramm out of the history books on this issue if he continues his assault on the Community Reinvestment Act.
In a speech last week to security traders, Sen. Gramm said that what began as a "little, minor capital allocation by government" in 1977 reached $680 billion last year in CRA loan commitments. That's more than the gross domestic product of Canada or the combined assets of the three largest American automakers, he said.
"This is a process which has gotten literally bigger than General Motors without anyone paying attention," he said.