Proxmire Hits Bush Group Findings: Says 'Embarassment,' Should Be 'Quietly Buried.' (William Proxmire)
Trigaux, Robert, American Banker
WASHINGTON -- Sen. William Proxmire blasted major regulatory reforms proposed earlier this week by Vice President Bush's panel on banking, calling them an "ill-disguised power grab over bank regulation by the Regan administration" and an "embarrassment."
The Wisconsin Democrat, minority leader of the Senate Banking Committee, also charged the Bush group with politicizing banking regulation -- "without saving any money" -- by proposing to move supervisory powers over financial institutions away from an independent Federal Reserve and concentrating them in the Treasury Department under the proposed Federal Banking Agency.
"The Bush task force has labored mightily and brought forth an embarrassment. Now that its work is complete, its proposals should be allowed a quiet and dignified burial," the senator quipped in a prepared statement.
This week, Mr. Proxmire said that for years he has advocated consolidation of bank regulation in a single, bipartisan commission "fee of political influence." This original objective of the Bush group -- consisting of the 13 top financial regulators -- was not achieved, he said.
"Instead, the Bush proposals would continue to regulate banks through three separate agencies while quietly expanding the power of political appointees in the Treasury responsible solely to the administration for power," Mr. Proxmire stated.
The Task Group on Regulation of Financial Services was formed 14 months ago to seek ways to reduce regulatory duplication and costs to the banking industry.
Included in the final recommendations are calls for a Federal Banking Agency, which, in effect, would replace the Comptroller of the Currency. It would regulate national banks and their holding companies, and determine the
permissble activities of all bank holding companies.
The Federal Reserve System would supervise only the 50 largest holding companies, including about 35 of the largest national bank holding companies. The Fed also would temporarily assume many of the regulatory powers over all state banks from the Federal Deposit Insurance Corp. -- but only until state banking agencies could be certified to handle supervision of their own state banks.
Once reviewed by the administration, the Bush proposals are expected to be introduced as legislation this spring by the Treasury to Congress. …