Barnard: 'Point Man for Banking Industry?' Georgia's Banker-Turned-Congressman Usually Counted on as Ally
Kahn, Ephraim, American Banker
WASHINGTON -- Doug Barnard Jr. is one banker whose stock has risen. At least in Congress, that is.
In 1977, after 25 years in banking, Mr. Barnard switched careers to become a U.S. representative. Today, because of key appointments to the House Banking and Government Operations committees, the relatively junior Georgia Democrat has become one of the more powerful members on issues affecting banking.
And that is a welcome development to bankers, for Mr. Barnard's convictions have led some to describe him as "the point man for the banking industry."
A check of some of his legislation shows why he is seen as sympathetic to the banking viewpoint.
Mr. Barnard has introduced a bill (HR 1013) that would require the Federal Reserve Board to begin paying interest on the reserves held by banks on certain deposit accounts. He has also offered HR 4484, which would permit banks to better compete with the Fed in check clearing.
And along with Delegate Walter Fauntroy, D-D.C., he has introduced a bill (HR 4008) proposing a limited easing of the geographic restrictions on banks -- so they can take advantage of the "natural marketplace for financial institutions" that exists in the Maryland-Virginia-District of Columbia area.
Mr. Barnard also has been outspoken about the need for Congress to take action that would substitute equality in regulation for the "helter-skelter" developments now taking place in the financial markets.
But not everything he is working on has a pro-banking slant. As chairman of the government operations subcommittee on commerce, consumer, and monetary affairs, Mr. Barnard has instituted an investigation of possible problems in the prosecution of criminal misconduct by bankers.
Mr. Barnard, interviewed in his congressional office, said that according to information obtained by the subcommittee, "It appears that in 60% of the cases of bank failures, there is some criminal element involved. The chief executive officer or some officer of the bank has committed some crime as far as banking law is concerned. The problem is, though, we see few instances of these people being brought to trial and convicted and serving time."
The panel, he added, has discovered that there have been a "tremendous number of referrals [of cases of criminal activity] by the bank regulators to the Justice Department, and yet we find that the Justice Department has actually not sought out the indictment of more than one or two." He said subcommittee hearings on the issue are scheduled for April.
Another issue he is studying is how to improve the ability of the federal insurance funds to collect money from the writers of bankers' blanket bond insurance policies. These policies cover banks for losses stemming from dishonesty of employees and officers, as well as from robberies, burglaries, and other occurrences.
Unlike the House Banking Committee, the government operations subcommittee cannot propose new laws. But as an oversight subcommittee, it has the important power to look into the ways federal agencies related to finance -- the regulators, the Securities and Exchange Commission, the Internal Revenue Service, and the Commodities Futures Trading Commission -- are doing their jobs. Exercising Power with Discretion
So far, Mr. Barnard, the former executive vice president for marketing and public relations of the $388 million-deposit Georgia Railroad Bank & Trust in Augusta, has exercised his expanded power on Capitol Hill with political discretion.
"We will certainly coordinate our activities so as not to bring about any duplication with what's going on in the Banking Committee," he said. The committee's chairman, Fernand J. St Germain, D-R.I., was instrumental in Rep. Barnard's appointment to the government operation committee. In short, Rep. Barnard doesn't plan to roil the waters or needlessly offend Rep. …