Bank Reform Legislation May Be Doomed

The Bush Administration has sharply reduced its lobbying on behalf of its own banking reform legislation, thus increasing the chances that the sweeping effort is doomed this year, key lawmakers complained Monday.

Two Democratic leaders in Congress who support the Bush banking plan said Monday that they have written to President Bush to urge the White House to take a more active role in pushing bank legislation.

“To pass bank reform you are going to need a full-court press from the Bush Administration and we haven’t seen anything at all from them,” said Rep. Charles Schumer (D-N.Y.), a leading Democratic member of the House Banking, Finance and Urban Affairs Committee. In a letter to Bush dated April 18, Schumer and Rep. Doug Barnard (D-Ga.), another key Democrat on banking issues, both complained that the Administration’s “initial enthusiasm for its (banking) proposal has virtually disappeared.”

Other Democratic leaders agreed with Schumer and Barnard on Monday.

L. William Seidman, chairman of the Federal Deposit Insurance Corp., also acknowledged Monday that the White House has failed to lobby aggressively for its proposal to dramatically alter the nation’s antiquated banking laws. But in a luncheon briefing with reporters, Seidman said he is unsure why the Administration has not moved faster to push its legislation.

Still, Administration officials denied that they have backed away from their proposal.