Executive briefing

Northwestern Financial Review, Sep 19, 1998

Banking

Overhaul

Back

On Track

The Senate Banking Committee approved financial reform legislation that will eliminate barriers between insurance companies, brokerage firms and commercial banks. The committee voted 16 to 2 in a move that will, among other things, repeal the 65-year-old Glass-Steagall Act and allow American financial services companies to operate globally with fewer limitations. The two senators to vote against the bill were Republicans Phil Gramm of Texas and Richard Shelby of Alabama. In May, the House passed the bill by a single vote. The vote had been delayed in early September after Republicans demanded that every reference to the Community Reinvestment Act be eliminated from the bill. Senate Democrats, in general, support community reinvestment and have indicated they may reject the bill if it weakens existing rules. In a related matter, acting Comptroller of the Currency Julie L. Williams said she opposes the committee's compromise that would let banks sell insurance and protect state regulators' authority in some-areas.

Bankruptcy

Reform

Passes

Hurdle

Bankruptcy reform passed its first test when the Senate on Sept. 9 approved on a 99 to 1 vote an initial procedural move to limit debate. However, unless Senate leaders can strike a deal that lets Democrats propose pro-consumer amendments yet still limit debate, opponents have a good chance of killing the legislation for the year by defeating a second cloture attempt.

FDIC Board

Member

Resigning

Joseph H. Neely II will leave the Federal Deposit Insurance Corp. on Oct. 1. Neely joined the five-member board in January 1996 and will leave less than halfway through his six-year term. Prior to coming to Washington, Neely, a Republican, was Mississippi banking commissioner for four years. For the FDIC, Neely was chairman of the board's audit committee, monitoring the agency's internal controls. He also was credited with the FDIC's July decision to speed the processing of merger, branch and deposit insurance applications submitted by healthy banks.

Bankers

Meet With

Republican

Leaders

Representatives from the American Bankers Association met Sept. 9 with House Republican leaders, who did not agree to accept any probank change the Senate may make in financial reform legislation. Bankers view the reform bill as being improved upon by the Senate. ABA President-elect, R. Scott Jones believes the group made progress meeting with House Speaker Newt Gingrich and others. ``They understand bankers are feeling disenfranchised and are wanting to mend the relationship between Republicans and bankers now. I think (the meeting) was very positive,'' Jones said.

OCC Updates

Examiner

Guide

The Office of the Comptroller of the Currency issued a small-bank examiner handbook meant to be less burdensome for number crunchers. The updated handbook applies to the 2,365 national banks with less than $1 billion of assets and requires examiners to evaluate a bank's practices rather than written policies. It is the sixth handbook the OCC has issued this year. The manual introduces a three-pronged framework for exams including core knowledge, core assessment and optional procedures. The handbook also requires examiners to inform bank managers promptly of their findings and to obtain commitments by bank managers to correct shortcomings.