Congressional Leaders Ready Deposit Insurance Hearings

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Congressional Leaders Ready Deposit Insurance Hearings

Congressional banking leaders say they will pursue a new legislative initiative to reform the nation's deposit insurance system.

In the Senate on Wednesday, Banking Chairman Sen. Jake Garn, R-Utah, called a press conference to unveil a series of at least four hearings that will begin July 23.

On Tuesday, Banking Chairman Rep. Fernand J. St Germain, D-R.I., spoke on the House floor also announcing he would begin holding hearings on deposit insurance reform as well as other issues.

In explaining the need for insurance reform, Mr. Garn emphasized that he perceived "no crisis' requiring emergency legislation. Rather, the subjects of the examination process, the nature of enforcement actions, and methods of assessing deposit premiums have long needed attention.

"Now is the time to conduct a complete analysis and review of the exam process and the deposit insurance system,' Mr. Garn said. Senate deposit insurance hearings will begin July 23, and continue on July 25, 31, Aug. 1, and possibly in early September after the month-long August recess, Mr. Garn said.

Mr. Garn's announcement of deposit insurance hearings immediately prompted speculation that he has lost interest in pushing comprehensive legislation empowering banks to enter new markets. Last fall, the self-described champion of deregulation promised to introduce a bill early this year and win full Senate passage quickly, as he did in the fall of 1984.

But seven months and numerous hearings into the 99th Congress, Mr. Garn has no apparent date to unveil his own legislative plan for the financial services industry.

At Wedneday's press conference, Mr. Garn declined to detail what new powers he would seek, and he would not outline any timetable for introducing a powers bill.

"It's not that I'm trying to be evasive, it's just that I don't know what the hell I'm doing,' Mr. Garn said.

The senator did allow that House action on a banking powers bill did weigh on his decision. "Certainly, I would like to see the House do something.'

On the subject of deposit insurance, Mr. Garn expressed support for risk-based premiums--though he has introduced no bill of his own. …