Near-Dead FDIC Reform Looking Like High Priority American Banker (12/27/01) Vol. 29, No. 26 p.1; Blackwell, Rob
Community bankers are within striking distance of seeing legislative action on deposit insurance reform. Advocates almost lost hope after the issue was placed on the back burner to make room for national security measures following the Sept. 11 terrorist attacks, but outside forces, including the persistent lobbying of key lawmakers like Sen. Tim Johnson (D-S.D.) and House Financial Services financial institutions subcommittee Chairman Spencer Bachus (R-Ala.), recessionary pressures, and the ardent support of the Federal Deposit Insurance Corp., conspired together to breath new life into the issue. That was a miracle in itself, according to some industry observers, who say that last year at this time the chairman of the Senate Banking Committee was Phil Gramm, an enemy of deposit insurance reform who pledged he would not take up the issue in 2001. Though disagreements over parts of the plan and opposition from the Federal Reserve and Treasury Department threaten to thwart progress, banking groups say they are happy that deposit insurance reform is still alive. Reform supporters are now courting the AARP to back a proposal they want to attach to the legislation that would dramatically increase the coverage level for individual retirement accounts. "It makes an enormous difference, particularly if the AARP comes down in favor of this," says Independent Community Bankers of America President Kenneth Guenther. "There is much more interest now among the AARP generation in having increased coverage at banks since the bloom is off the stock market. I think the odds are excellent there will be legislation passed in 2002."