Magazine article American Banker

OCC Plans for Bank Powers Seen as Unaffected by Flap

Magazine article American Banker

OCC Plans for Bank Powers Seen as Unaffected by Flap

Article excerpt

Though the spotlight of controversy will continue to shine on Eugene A. Ludwig, the comptroller of the currency is expected to press forward with new powers for banks.

"I do not see any fallout," said H. Rodgin Cohen, a partner with Sullivan & Cromwell law firm in New York. "No one believes he acted improperly.""It won't have any effect whatsoever," added Gilbert T. Schwartz, a partner at Schwartz & Ballen law firm here.

"Any indication that the comptroller would change his views because of what is an attempt to embarrass him would be an admission that there was something wrong."

The vast majority of banking experts agree that the ruckus over Mr. Ludwig's presence at a May 13 coffee with President Clinton, 17 bankers, and top officials of the Democratic National Committee will blow over and that the agency will move forward on bank applications for new powers such as securities and insurance underwriting.

While Mr. Ludwig is refusing interviews, his chief counsel insisted that national bank applications will be processed as usual. "Nothing has changed," Julie L. Williams said. Most people who follow banking closely say the issue is being blown out of proportion, but those same sources wonder privately whether the scandal will force Mr. Ludwig from office.

Agency spokeswoman Lee Cross said Mr. Ludwig plans to finish his five-year term, which ends April 4, 1998. "He is not quitting," she said Monday.

On Friday, House Government Reform and Oversight Committee Chairman Dan Burton, R-Ind., asked Mr. Ludwig to provide copies of everything he submits to Rep. Spencer T. Bachus, House Banking's general oversight subcommittee chairman.

The Alabama Republican asked Mr. Ludwig on Jan. 27 to turn over all documents relating to the May 13 meeting as well as list of topics discussed. Among other things, the lawmaker wants to know the date and substance of any subsequent conversations Mr. …

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