WASHINGTON - Amidst much political uncertainty - the unsettled race for President, an undetermined Republican margin in the Senate, and the defeat of at least five key congressional allies - financial services executives are finding comfort in the return to Washington of an old friend.
Delaware Gov. Tom Carper, who with 56% of the vote captured the Senate seat Republican William V. Roth has held for 30 years, was a staunch champion of industry causes as the state's chief executive the last eight years and as an active House Banking Committee member from 1983 to 1992.
Executives are banking on the 53-year-old Democrat to remain an advocate in the Senate.
"He's been a steady supporter of the banking industry because the industry plays a big role in the state, and I believe he will continue to be supportive of the banking and credit card industry as a U.S. senator," said Lance L. Weaver, senior vice chairman of MBNA America Bank, the country's No. 2 credit card issuer, which is based in Wilmington, Del.
But Mr. Carper insisted in an interview, "I don't have a banking agenda. I just don't."
Still, over soup and a sandwich at his Wilmington home last week, Mr. Carper ticked off a list of economic priorities that many bankers share.
Overhauling bankruptcy laws to require insolvent individuals to repay more of their debts tops his economic agenda, closely followed by developing tax incentives to encourage Americans to save more. He opposes enacting new privacy laws, at least until it is known how effective existing law will be at protecting customer information. And as governor, he helped eliminate his state's marriage "penalty" and estate taxes.
But Mr. Carper is not in sync with industry positions on all issues. For example, as senator, Mr. Carper vows to defend - but perhaps update - the Community Reinvestment Act, which requires banks to provide loans, service, and investment in the communities where they take deposits.
On bankruptcy reform, Mr. Carper said he expects to help shepherd legislation next year. Like most Congress-watchers, Mr. Carper is pessimistic that the legislation will be taken up when lawmakers reconvene for a "lame-duck" session next week, thus leaving the issue to be dealt with next year.
He already has experience in lobbying for passage of the measure.
"As governor and the chairman of the National Governors' Association, I've been fighting hard for reforming bankruptcy laws," he said. "I worked to galvanize the full support of all 50 governors behind making major changes in the bankruptcy laws of this country. I testified before the House Banking Committee. I dogged House and Senate members to take up [bankruptcy reform legislation], amend it if they had to, but to move the bill. I urged the President to sign it if it came to his desk."
He is optimistic that the moderate leanings of his fellow freshman senators bode well for passing bankruptcy reform legislation in the next Congress. If anything, he said, "I don't think it can be any more difficult than it has been in the last couple of years."
Mr. Carper's passion for reforming bankruptcy law stems more from his personal principles than from lobbying efforts by his state's powerful credit card industry, which employs 30,000 of Delaware's 750,000 people and contributed $261,050 to Sen. Roth's campaign, compared with $89,045 to the Carper Senate campaign. (Commercial banks split their contributions almost evenly, giving $48,850 to Carper and $41,750 to Roth.)
"Personally speaking, I believe in paying your debts if you have the ability to pay them," Mr. Carper said. "The idea that people who have rung up large debts, have the ability to pay their debts, but can walk away from them is, to me, abominable and should be stopped."
Compromise bankruptcy legislation - which the House passed in October but has stalled in the Senate - includes a provision prohibiting bankrupt parents from walking away from child support payments. "This bill would be good for kids and families," he said.
The financial services industry's support of bankruptcy reform is Mr. Carper's third reason for backing the overhaul. "The financial services industry in our state would like to go a good deal further," he said, "but most said this is a fair and reasonable good step in the right direction."
Privacy legislation is another area in which Mr. Carper's philosophy parallels the industry's. "I have to stick to a wait-and-see approach" to the need for new privacy laws, he said. "Let's see how the opt-out [privacy provision in the Gramm-Leach-Bliley Act] works, what kind of abuses occur, and if they do, let's fix them."
Though he supports expanding savings opportunities, Mr. Carper is likely to take a different tack than Sen. Roth. Bankers were gung-ho behind Sen. Roth's as yet unsuccessful effort to enact legislation increasing the maximum allowable contribution to an Individual Retirement Account to $5,000 per year, from $2,000, and to employer-sponsored 401(k) plans to $15,000, from $10,500.
Mr. Carper would focus the incentives on lower-income people.
"I admire the work Sen. Roth has done, but the problem is not encouraging upper- and upper-middle-income to save," he said. "I'd like us to set up, outside of Social Security, an account where the federal government might deposit funds as an incentive to encourage lower- and middle-income families to save."
The governor established a similar program in Delaware, apart from the state pension plan and geared toward encouraging lower- and middle-income state employees to save.
Mr. Carper is a strong supporter of CRA for similar reasons.
"Delaware benefits enormously from the Community Reinvestment Act," he said. "Delaware has a homeownership level that is much higher than the national average - we're about 72% versus 65% for the rest of the country. I'm convinced one of the reasons is because financial institutions, in an effort to meet their CRA requirements, have gone the second mile in ways that have helped people become homeowners here that may have not occurred in other places."
He may find himself taking on Senate Banking Committee Chairman Phil Gramm, a Texas Republican who has crusaded against CRA, which he says community activists have used to "extort" money and unsafe investments out of banks.
"I'm told that Phil Gramm would like to put a stake through the heart of CRA, and I'll be there to try to discourage him from doing that," Mr. Carper said. "I'm not interested in ending it, but I might be interested in amending it to reflect the changing times."
Taking on senior colleagues - and Texans - is nothing new for Mr. Carper. As a member of the House Banking Committee during the depths of the savings and loan crisis in 1987, he took on Texas Democrat Jim Wright, the powerful Speaker of the House at that time, on the issue of recapitalizing the now defunct Federal Savings and Loan Insurance Corp. The speaker supported the U.S. League of Savings Institutions' policy to hold the industry-financed rescue to $5 billion. Mr. Carper pressed for $15 billion, and eventually Speaker Wright came around.
Mr. Carper also worked to protect the right of banks in his state to sell insurance nationwide and supported interstate branching for banks. He's proud of his sponsorship of a balanced budget amendment and of his role in helping to strengthen the capital standards applied to banks and thrifts.
How much Mr. Carper can do for the banking industry depends in large part on his committee assignments. With the exclusive, tax-writing Finance Committee - of which Sen. Roth was chairman for five years - out of his reach as a freshman, Mr. Carper's first choice is a spot on the Senate Commerce, Science, and Transportation Committee.
Though Carper campaign aides said immediately after the election that he might seek a seat on Senate Banking, this now seems less likely. Mr. Carper said his strategy is to avoid duplicating the committee assignments of Delaware's tiny, three-member congressional delegation. Sen. Joseph R. Biden Jr., a Democrat, is on the Foreign Relations and Judiciary committees, and Rep. Michael N. Castle, a Republican, is on the House Banking, Education, and Intelligence committees.
However, Mr. Carper may still end up on Senate Banking.
"Senators serve on as many as three or even four committees, so the idea of my service on the Senate Banking Committee, if not now then further down the road, is a real possibility," he said.
Regardless, do not expect financial services concerns to fall off Mr. Carper's radar screen.
"I would expect him to be a significant player on our issues whether or not he is on the Banking committee: one, because he has a history as governor and as a member of the House Banking Committee, and two, because the credit card aspect of the banking industry is so central to the economy of Delaware," said Edward L. Yingling, head of government affairs at the American Bankers Association.
Though acknowledging that Mr. Carper would have "a greater impact" on Senate Banking, Mr. Yingling said, "No matter where he is, he'll be a player when issues come to the floor.
"Our industry has interests in many committees, so it can be helpful to have a knowledgeable person on these other committees as well."
Mr. Carper, a Navy flight officer during the Vietnam War, began his civilian career in Delaware's economic development office. He was elected state treasurer in 1976 and held the office until he entered Congress in 1983.
Related Content Online:
