Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, October 26, 1993 TAG: 9310260088
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
"We have anachronistic, inconsistent and sometimes excessive legislative and regulatory restrictions on our financial system," Treasury Secretary Lloyd Bentsen told the Center for National Policy. "This is too critical an element of our economy to have its potential held back."
But at the same time, he said, the banking system must be changed "in a careful, deliberate manner to get it ready for the next century."
"I think that's really good news for the industry - and high time," said Warner Dalhouse, chairman of First Union National Bank of Virginia.
But Dalhouse said it's good news for the country as well. Bank customers and shareholders, he said, are paying for the cost of a proliferation of banks forced to operate by outdated regulations.
Robert Lawson, president of Crestar Bank in Roanoke, said he had not seen Bentzen's proposals. But he said Crestar generally favors anything that liberalizes rules and regulations under which banks operate.
Bentsen outlined in broad terms three areas in which action could be taken quickly. He said more details would be available in the next few weeks when his agency's officials testify before Congress.
First, he said, Congress should reach agreement on a bill to complete the savings-and-loan bailout "to make depositors whole and return these remaining thrifts to the economy so their assets can work again for the American people."
The Senate and House have enacted different measures.
He also called for passage of the Community Development Financial Institutions Act that would establish a $382 million fund to help community-development banks provide credit in poor neighborhoods.
And, Bentsen said, the administration supports the objectives of legislation pending on Capitol Hill that would permit the Treasury secretary to deny benefits to financial institutions based in countries that discriminate against U.S. companies.
"Too often the global playing field looks like the Rockies," he said. "Barriers - both formal and informal - prevent U.S. firms from entering markets on an equal footing with their competitors."
Over the longer term, Bentsen said, the administration is interested in "a rational consolidation" of the functions of the four federal agencies that regulate banks and thrifts.
"By eliminating duplicative regulatory agencies, we can help reduce inconsistent interpretations of the same laws and rules," he maintained.
And, he said: "Permitting a true interstate banking system can translate into increased lending, a safer and stronger banking system and more competitive services for all consumers in all communities."
Bentsen said there already is a "de facto system of interstate banking," but he called it a "patchwork system" filled with "impediments to efficiency."
Banks wanting to do business in another state now must open separate companies there, often resulting in duplication of functions.
"Our preference is to build upon what the marketplace has created rather than reinventing the banking business," he said.
"The basic approach would be to let banking organizations convert existing multibank, multistate operations into a single-bank, multibranch operation."
Staff writer Mag Poff contributed to this article.
by CNB