Magazine article American Banker

Regan-Baker Switch, Conover Departure Leave Industry Wondering about Future: While Enduring Continuing Flurry of Regulatory Crises, Comptroller Struck Blow for Expanded Bank Powers

Magazine article American Banker

Regan-Baker Switch, Conover Departure Leave Industry Wondering about Future: While Enduring Continuing Flurry of Regulatory Crises, Comptroller Struck Blow for Expanded Bank Powers

Article excerpt

WASHINGTON -- In the last three years, Comptroller of the Currency C. T. Conover has been through one regulatory crisis after another. The Penn Square failure. International debt problems. The government rescue of Continental Illinois. Supervisory crackdowns on big bank loan loss reserves. Nonbank banks -- and a lot of congressional heat.

Throughout, the silver-haired comptroller has survived. And now that Mr. Conover, at age 44, has announced that he is leaving the OCC this spring, he is anxious to be remembered in banking history for more than his decision to approve limited-service banking across state lines.

"I'll be disappointed to be remembered as the nonbank bank comptroller,'" he said Tuesday.

Like it or not, that name may stick with Mr. Conover, who decided early on as chief regulator of national banks that the industry should be offering more products and services -- and on an interstate basis. Such a decision met a wall of opposition, but Mr. Conover has in his direct style bludgeoned a small but expanding hole in the concept of a protected and restricted banking industry.

If there is a long-term, fundamental contribution by Mr. Conover, it will be his part in raising interstate banking to the threshold of national legislative attention. In approving nonbank-bank applicators across state lines, Mr. Conover suggested, one intention was to force Congress to act. He said he would support legislation closing the nonbank-bank loophole if it also endorsed regional banking compacts with a phase-in to full interstate banking in five years or so.

Before joining the Reagan administration from his California consulting firm of Edgar, Dunn & Conover Inc., Mr. Conover was quoted as saying that one of the things people must understand is how difficult it is to make changes in a major organization. Nevertheless, as comptroller Mr. Conover is known to have brought a strongly disciplined management style to the federal agency, improved internal operations, and introduced technology -- microcomputers to enhance bank examinations, for instance -- in an effort to raise efficiency in an organization operating with a $180 million annual budget. Mixed Reactions in Congress and Administration

Reactions to Mr. Conover's announcement were mixed. Sen. Jake Garn, the Senate Banking Committee chairman, has generally supported Mr. Conover's aims, while House Democrat and Banking Committee Chairman Fernand St. Germain has been openly critical.

Responding to news of Mr. Conover's announcement, Mr. St Germain stated, "C.T. Conover's announcement that he is stepping down as comptroller of the currency comes as no surprise. I have made no secret of my concern that his aggressive stance in favor of the banking community's expansionist plans runs counter to the intent of Congress and the wishes of the public. The critical question now is what type of person the President will select to replace Mr. …

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