WASHINGTON -- Bank holding companies. The very words evoke an image of powerful corporations on the cutting edge of industry change.
In fact, much of the banking legislation currently under consideration on Capitol Hill deals with what bank holding companies should or should not be allowed to do. And right in the middle of the legislative process is Donald L. Rogers, president of the Association of bank Holding Companies.
Interviewed in the association's offices near the Treasury Department, one block from the White House, Mr. Rogers reflected on his 30 years in Washington and expressed his views on some aspects of banking's relations with Congress this year and next, when lawmakers are expected consider issues of vital importance to the industry.
Mr. Rogers, 56, is a tall, soft-spoken man whose down-home manner belies his reputation as one of Washington's shrewdest political analysts. He came to the nation's capital in 1953 fresh out of law school and went to work for the Senate Banking Committee.
He rose to the position of committee counsel and worked on the Bank Holding Company Act of 1956 -- a project that introduced him to many bankers. Two years later, he was invited to head a new trade group for bank holding companies. Same Chief, Different Group
Mr. Rogers is still holding the job, although the association has changed. Starting with 13 bank holding companies with about $13 billion in assets, the group now has 180 member holding companies with $1.3 trillion in assets. That's about 75% of U.S. banking assets.
The association's opinion is highly regarded on Capitol Hill because of its membership and its president's political savvy. But even Mr. Rogers could not help forge a united banking stance in 1982, a division that he says still haunts the industry.
"The banking community's two years behind where it should be. Banking should have gotten new powers as part of the Garn-St Germain Act of 1982."
At that time, Mr. Rogers observed, "The thrift industry was in serious trouble. Congress had to do something to bail it out, and that was the opportunity for banks to say, 'Fine, let's help the thrifts, but let's give something to banking.'"
But "the banking community dropped the ball," he said. The industry didn't make its points "partly because banking was not united. We didn't stand firm enough and missed an opportunity.
"And here we are, two years later, still making the same arguments about underwriting revenue bonds, being in insurance, being in the mutual funds business, and being in real estate." Meantime, Mr. Rogers added, "our competitors have made great strides."
Mr. Rogers believes that in January 1983, banking should have started making congressional leaders live up to their promises of early action on measures to expand the scope and powers of banks. Instead, "the fact that the banking industry got involved in this tremendous battle over withholding meant there was no time left to take up new powers and services for banks."
Although the 1984 session may be shortened by elections, Mr. Rogers believes it is nevertheless crucial for banking to pull out all the stops in an effort to obtain the additional powers that banks need to compete in the marketplace this year.
Banking "must make an all-out effort to try to catch up. We can't afford to delay any longer.
"But it's going to be difficult," he added, because "we don't have that vehicle, and members of Congress don't perceive any crisis of emergency that makes them feel they have to act. In banking legislation, it has usually taken that kind of atmosphere to get anything done."
Regardless of what happens in 1984, Mr. Rogers believes "1985 is going to be the year when interstate banking will be the big issue in Congress. The fact that states are moving on their own will finally make Congress face up to the issue." Second Issue Is Taxation
The second big issue of 1985, Mr. Rogers says, will be taxation -- corporate taxes in general and taxation of banks in particular. Congress isn't likely to take substantial action to reduce the federal deficit in an election year, Mr. Rogers predicted, but the lawmakers will try to come to grips with it in 1985. This will involve some sort of tax reform program, he said, since "you can't do it just by cutting spending."
Banking's victory in the withholding battle may have repercussions when Congress considers bank taxation, Mr. Rogers said. In 1983, when banks should have been concentrating on improving their competitive position, he said, "the whole industry was distracted by the fight on withholding -- and it was a negative issue.
"The banking industry offended the President of the United States, the secretary of the Treasury, the speaker of the House, the chairmen of the House Ways and Means and Senate Finance committees, and succeeded in defeating all those persons in leadership positions.
"People who get defeated don't forget it, especially when they're in politics. Even though nobody will every say it, the results of legislation in 1985 will show that feeling," he predicted. Never Solicits for Membership
Mr. Rogers takes pride in the fact that the association's staff has been kept lean, that the group has never solicited eligible companies to join, and that "we try to pick the issues" on which the association will take a position.
The association's current ceiling on membership is 200 bank holding companies, divided into four categories of 50 each: less than $1 billion in assets; between $1 billion and 2.5 billion; $2.5 billion to $6 billion; and over $6 billion. There are 50 memberships in each category, to avoid dominance by any single asset-size group.
In all, the number of bank holding companies has grown from 53 in 1956 to 4,555 in 1982. As of the first of this year, applications for 115 morewere pending with the Federal Reserve Board.
The holding company association made what many observers consider a shrewd choice in adding former House Banking Committee counsel James Sivon to its staff last year. Some industry observers speculate that Mr. Sivon, now association senior vice president and general counsel, may be next in line as president when Mr. Rogers retires, carrying on the tradition of former Capitol Hill staff members heading up the organization.
Keeping the size of staff and membership small, Mr. Rogers said, facilitates decision-making because each member holding company must designate one of its two top-ranking officers as its principal representative. (An exception is made for holding companies with more than $20 billion in assets, which can name the third-ranking official as the principal representative). Only one representative from each member organization may attend the annual meeting.
This means that association policy is made by top executives of the member holding companies who are "in a position to bind their companies." Partly because of this direct involvement of its members, Mr. Rogers said, the association was able to be the first national banking group to take a stand on interstate banking.
In 1980, it proposed authorizing bank holding companies to acquire other bank holding companies in contiguous states. Then last year, he said, the association "urged the bank regulation task force headed by Vice President George Bush to get the Federal Reserve Board out of the bank regulatory business."
But he emphasized that such major policy positions aren't adopted lightly. For example, until last year, the association favored Fed regulation of bank holding companies, and "we argued in Congress that they should regulate us."
But times and circumstances changed, Mr. Rogers said, and "we can't afford to have the Fed as our regulator any more. We need somebody -- our regulator at the federal level -- who recognizes we have a competitive problem and gives us some leadership in trying to solve it.
"Whether it's the Fed or some other agency, we should have somebody on the federal level who feels it's their responsibility to help banks do a better job and give them leadership. Certainly, the S&Ls have benefited from the leadership of their regulators."…