Academic journal article ABA Banking Journal

New Ball Game in Washington?

Academic journal article ABA Banking Journal

New Ball Game in Washington?

Article excerpt

With the arrival of the 104th Congress in Washington this month, business leaders and bankers across the country are hopeful that positive change in government will soon materialize.

We've read and heard plenty about the meaning of this new Congress. For the first time in 40 years, Republicans are in control of the U.S. House of Representatives, and they're in charge in the Senate as well. Conceivably, big changes in the way government operates could be on the way, and most people see the Republican takeover as being good for business and a promise of less government intrusion in Americans' lives. The Republicans' "Contract with America" seems to spell that out.

Expectations are very high, in other words. Perhaps they're too high. But time will tell whether this Congress represents a truly new ball game for our industry, or the same old game gone into extra innings.

What specifically do bankers want out of this new Congress? We have several top priorities in mind.

First, we would like to see a speedy return to the topic of Superfund reform. The last Congress couldn't quite put together the right coalitions and legislative language to satisfy the many different constituencies that were attracted to the plan to reform Superfund. We were very close, however, and bankers would like to see the momentum from the waning days of the 103rd Congress carry over to the 104th. We expect, and will be working for, an early legislative effort to reform Superfund and free lenders and trustees of the threat from environmental liability.

Then there is the not-so-small matter of the scheduled reduction in our deposit insurance premiums. The Bank Insurance Fund, already operating at a record level, will shortly reach the mandated level of 1.25% of all insured deposits. That means that the FDIC will be able to announce, probably later this year, that banks' deposit insurance premiums will be reduced to the level they were before the Bank Insurance Fund required recapitalization. Good news, indeed.

For bankers, this lowering of our deposit insurance premiums should not be a question, but a given. Our higher premiums helped restore the fund to its current record level, and it is now a matter of fairness to return to the lower premiums. No other public-policy concern should be confused with this one--no merger of the funds, no artificially high premium schedule engineered to strengthen a lagging Savings Institutions Insurance Fund. …

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