Republicans accuse top bank regulator of power grab
WASHINGTON (AP) _ Already under fire for his role in a White House fund-raising event, Comptroller of the Currency Eugene Ludwig tangled Thursday with the chairman of the Senate Banking Committee as Republicans accused him of a power grab.
At the start of a hearing, Ludwig was lambasted by GOP members of a Senate Banking subcommittee, led by Sens. Alfonse D’Amato of New York and Lauch Faircloth of North Carolina. Ludwig, who is the chief regulator for national banks, later denied the accusations.
D’Amato, chairman of the full committee, accused Ludwig of mounting a ``campaign to aggrandize and centralize regulatory power in his agency″ by, among other things, actively recruiting banks chartered by states to convert to nationally chartered status.
In fact, D’Amato told Ludwig his actions were so damaging that he felt compelled to propose legislation to strengthen the dual system of national and state-chartered banks, ``which I think you’re attempting to destroy.″
D’Amato and other Republican members of the subcommittee on financial institutions also contended Ludwig had threatened the authority of state insurance regulators by deciding that the sale of insurance by national banks should not be subject to traditional state regulation.
In a prickly exchange, D’Amato told Ludwig, ``This is nothing more than a power grab.″
Ludwig, angrily telling D’Amato at one point that ``you’re not giving me a chance to answer your question,″ insisted he has told agency employees not to solicit state-chartered banks to switch to national status.
``We certainly have not done that,″ Ludwig said, responding to D’Amato’s accusations of encouraging ``charter-flipping″ by banks. ``I’ve been very cautious.″
Controversy over a White House coffee klatch that Ludwig attended with top bankers is delaying Senate approval of President Clinton’s choice, Ellen S. Seidman, to head the agency that supervises the savings and loan industry.
As reported previously by The Associated Press, Seidman, Ludwig and Treasury Undersecretary John D. Hawke wrote Clinton a memo before the May 1996 coffee. Seidman did not attend the event, which brought together the nation’s top bankers and Democratic Party fund-raisers _ but Ludwig did.
Ludwig has acknowledged that his participation was inappropriate and said he would not have gone if he had known it was sponsored by the Democratic Party. Clinton has said it was a mistake to include him in a political event.