William L. Sutton would like to tell you that the nation's banks will soon be selling insurance, real estate, stocks and bonds . . . who knows, maybe even gasoline, video movies and six packs of Diet Pepsi, if that's what it takes to keep the doors open.
But for the time being, Sutton concedes, banks will just have to go on being, well, banks, doing the things banks have always done.That's not because the American Bankers Association, for which Sutton is an adviser, has given up on its quest for expanded powers - such as the authority to market the aforementioned insurance, real estate, and securities - it's just that ABA members realize the Congress has a higher priority these days.
That priority, of course, is President Bush's 322-page plan to save the nation's savings and loan institutions and the Federal Savings and Loan Insurance Corp. (FSLIC), which guarantees the deposits therein.
"Until the president's bill is passed - and the ABA supports his plan - they (Congress) simply won't be talking about other banking legislation," said Sutton in an interview.
Sutton, who in "real life" is chairman of First Florida Bank of Tallahassee, was in Salt Lake on an ABA media tour to drum up support for the thrifts (as S&Ls are known in the financial industry) legislation.
"It's not a perfect plan," said Sutton. "We (banks) will have to pay more for FDIC (Federal Deposit Insurance Corp., which guarantees bank deposits) and the thrifts will have to pay more, but it addresses the problem."
Sutton knows the process will likely be a long one before the restructuring bill is complete and banks can get back to lobbying for banking issues. The Senate should be no problem, but the House is another story.
"With turf battles, six committees to work through, and all the egos to deal with, the earliest it could be on the president's desk is June," he said. "We're hoping it will emerge as a clean bill without a lot of amendments."
Sutton said he hopes legislators view the thrift crisis as a critical emergency of monumental scope.
"If you add up the cost to rebuild Europe under the Marshall Plan after World War II, along with the cost of bailing out Lockheed, New York City and Chrysler combined, this is bigger," said Sutton. "As you and I sit here, it's costing $35 million a day to operate FSLIC."
Until FSLIC and the thrifts are recapitalized, said Sutton, "We have some real doubt about the continued existence of the entire industry."
Thinking the unthinkable, would that be so bad? Well, maybe not, says Sutton.
"The fact is, the savings and loans haven't proven they can do anything very well other than make home loans - the thing they were originally created to do. They went wild with stock market hedging, they invested in fast food restaurants, they got involved in unsound real estate proj-ects, they lent money to unscrupulous developers . . . it's not a good track record."
But haven't banks also done those things?
Well, to some degree, concedes Sutton. "But we haven't had 1,000 banks close down."