Magazine article American Banker

Interstate Proposal Seen Defeated by Tie-In with New Powers

Magazine article American Banker

Interstate Proposal Seen Defeated by Tie-In with New Powers

Article excerpt

The debate about interstate branching spilled onto the "MacNeil/Lehrer News Hour" on public television last week.

In a discussion about the state of the banking industry, Jerome Powell, the Treasury Department's under secretary for finance, and Rep. Charles Schumer, D-N.Y., agreed that widespread support exists for legislation permitting branching across state lines. That prompted news anchor Jim Lehrer to ask why such legislation hadn't been approved. Excerpts from the discussion follow.

LEHRER: Why could you all not agree on [interstate banking], Mr. Secretary?

POWELL: Interstate banking was stopped in its tracks by one senior member of Congress last year.

It has bipartisan, majority support in both chambers, and we ought to have it. We should have gotten it done. It had nothing to do with....

LEHRER: And one member of Congress was opposed, and he was powerful enough to stop it?

POWELL: Sure was.

LEHRER: Is that true, Congressman?

SCHUMER: Well, I don't quite agree with the Secretary's view.

LEHRER: Who was the congressman, Mr. Secretary? POWELL: Chairman [John] Dingell [D-Mich.] of the Energy and Commerce Committee.

SCHUMER: But he didn't. His main thrust was for helping preserve [the Glass-Steagall Act's separation of banking and underwriting].

There was a big package that the administration put in, including interstate banking and including the banks' getting into new powers. And it was the new powers, using the insured deposits for those new powers, that was the real deadlock. …

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