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Bankers warned of tighter restrictions

Bankers' hands could be tied in the coming year by lawmakers bent on correcting the mistakes that led to the savings and loan crisis, a top industry official said Monday. Kelly Holthus, outgoing president of the American Bankers Association, warned his colleagues of congressional overreaction in a farewell speech to the organization's annual convention.

"The temptation for Congress to take drastic measures in the current political environment is strong," said Holthus, whose term expires today.

"All of us will have to work hard to make sure that commercial banks are not tarnished by the S&Ls' record. Otherwise, we'll surely find ourselves the victims of misguided legislation."

Leaders of the banking industry say they expect a rash of legislation affecting their industry in the next Congress, and at this week's ABA convention they are firing up the lobbying machine.

"It's up to us to make sure that in politicians' zeal to correct a wrong _ the banking industry doesn't end up battered instead," Holthus said.

Several of the nation's top banks are having trouble because of the slowdown in the economy and fallout from bad loans. But those attending the ABA meeting are going to great lengths to distance themselves from the thrift industry's problems.

"I'm not trying to paint over the problems because they're out there," Holthus said earlier Monday in a meeting with reporters. "But there's a tremendous difference between our problems and the S&L industry. We're constantly painted with the S&L brush."

Bankers maintain that their industry is better capitalized, better regulated and more solidly insured.

Richard Kirk, who will be installed as ABA president today, said the laws governing deposit insurance and the products and services allowed for banks are likely to be tackled by Congress in 1991.

William S. Bushnell, a consultant with Danielson Associates in Rockville, Md., said the bankers have good reason to be concerned about Congress.

"It's always a concern of a politician to say, "Let's blame somebody,' " Bushnell said.

Bank analyst Alex Sheshunoff said Congress may well slap the bank industry with more taxes. But he said that's not necessarily a bad thing, if banks as well as other sectors feel the pinch.

"What might be interpreted as overreaction might be healthy in that it would ask the whole system to bear the costs it has to bear," Sheshunoff said.

"The bank industry is vulnerable, just as any group of individuals perceived to have net worth or income, as they (Congress) approach the issue of fairness."

Edward L. Yingling, executive director of the ABA's government relations group, said there are two divergent trends emerging as Congress approaches banking legislation. One view, he said, favors action to stimulate competition and the other is to "hunker down."