BANKER UPDATE: THE PLAY WENT ON
The House Financial Services Committee on April 17 overwhelmingly approved deposit insurance reform legislation.
A full committee markup of important and controversial legislation in the House of Representatives-the people's House-is often good theater. Taking the lead in this production was House Financial Services Committee Chairman Mike Oxley (R-OH). Subcommittee Chairman Spencer Bachus (R-AL) was brilliant in a key supporting role.
Heroes and villains came and went amidst emotional outbursts and the death of amendments. The drama was serious since important and controversial public policies were being shaped. From our point of view, there was a happy ending. The outcome was particularly satisfying since most of the players were reading from the same script by the time the final curtain fell.
The most sour note came the day before the markup, when the president of the Financial Services Roundtable-the trade association representing the biggest banks-said that he hoped lawmakers would scrap the pending legislation entirely. Because of the big-bank stance, the ABA didn't buy a ticket to the performance. It is the ABA's habit to remain a silent partner-sometimes to the detriment of community banking-if the biggest players don't want the show to go on.
But the show did go on. The vote on final passage was an astounding 52-2, which increases prospects for prompt passage of the legislation on the House floor.
The gifted, pro-industry and pro-community banking Chairman Oxley stated in his curtain call, "I urge the Senate to follow our lead and pass this common sense, bipartisan legislation that will insure the vitality of the American economy as it emerges from recession."
In his soliloquy to the committee, distinguished Representative Jim Leach (R-IA) correctly noted that what deposit insurance coverage levels presently do is force depositors to "make a choice that is not community oriented."
One of the bloodiest scenes where partisanship came close to carrying the day came when Rep. Cantor (R-VA) sought to strike from the bill a key Democratic amendment that subcommittee Chairman Bachus had accepted. This was a Maxine Waters (D-CA) amendment, supported by AARP, that provides for a discount on premiums paid on deposits in lifeline accounts. While ICBA stood in the wings with Waters-Bachus, Cantor's thrust missed its mark by a 23-34 vote. Bipartisanship carried the day.
Rep. Carol Maloney (D-NY) played the role of chief villain by seeking to strike the proposed increase in general deposit insurance coverage levels in the bill. She invoked the names of mighty government officials, but perhaps neglected to notice the large and politically powerful gorilla flexing its muscles backstage. AARP supported the general coverage increase "to assure older Americans that they will have secure banking services and investment options available to them. Currently, the alternative is to bank at more distant institutions or invest in the more volatile securities markets."
Good drama. Good public policy that played to a full and generally appreciative audience.