Just a few short months ago, Maryland's banking business was the target of widespread legislative wrath and populist preachments against an allegedly runaway industry that lawmakers agreed had to be leashed for the public good.
"The primary issue is that we must regain the ability to control and regulate this industry," said House of Delegates Speaker Benjamine L. Cardin, reflecting the mood of the legislature in January. At that point, the banks had won a court ruling allowing lending institutions to almost double interest rates and charge "membership fees" for credit cards.
"Rhetoric, I think that's what it was, rhetoric," said William K. Weaver, the banker's silver-haired statehouse persuader, perched in his gallery catbird seat high above the Senate chamber Saturday as the three-month session neared an end.
His remark appears justified by events. Hardly any of a slew of tough banking bills survived the legislative wringer.
"The banks benefitted from legislative inaction," said Maryland Attorney General Stephen H. Sachs, who wishes it were otherwise. Said Del. Steven V. Sklar (D-Baltimore City), the leading architect of the anti-banking battle: "So-called agreements and packages worked out were all torn to shreds."
In fact, except for passage of a bill banning credit card fees -- a hollow victory if banks can charge higher interest rates on unpaid balances, as the January court ruling allows -- and, considering the initial angry legislative mood, it was a very good year for the Maryland Bankers Association in the General Assembly.
The anger stemmed in part from the announcement last year by two suburban banks of plans to charge credit card holders annual fees of $15. The timing just a few days after Gov. Harry Hughes signed a law limiting interest charges to 18 percent could not have been worse. The fact that the bankers association had paid the way of several lawmakers to a Bermuda convention just seemed to fuel the fires.
Attorney General Sachs ruled the credit card charges out of order. The banks countered with a lawsuit contesting the legislature's power to regulate interest rates. Baltimore Circuit Judge Marshall A. Levin sided with the banks on both counts but said the legislature could, if it wished, enact legislation that would effectively stymie the banks in both areas. A "surgical override" is what Sachs called it, advocating such a course. The banks, meanwhile, agreed not to make any changes pending resolution of the court appeal of Levin's ruling.
So the 1981 General Assembly began with clarion calls for action.
The tide ebbed, it seemed, after leaders of the House Economic Matters Committee were wined and dined by bankers at the Annapolis Yacht Club. Then, told the banking industry would flee to other states should the General Assembly pass legislation limiting interest rates, Gov. Harry Hughes agreed the whole idea deserved further study -- over the summer.
"The fervor kind of died down once we made that decision," said Del. Patricia Sher (D-Montgomery), a member of the committee that went along with Hughes' position.
"I call it collaboration with the banks' legislative brinksmanship," said Sklar. "The Hughes administration caved in on the matter, more concerned with the prospects of economic development as a catchword for the protection of the banks than for the consumers' interest."
In Sklar's mind, Hughes and Del. Fred Rummage (D-Prince George's), whose committee consigned the limiting legislation to further study this summer, formed an unholy trio with Weaver, the banking lobbyist.
Sklar vented some of his frustration during the annual evening of skits called the legislative "Follies," where he portrayed a masked man known as the "Loan Ranger" -- meant to be Weaver -- accompanied by an Indian called "Rummagonto." In the skit, which Sklar wrote, the two men held up the House Economic Matters Committee, saying, "We want 33 percent."
"Don't shoot," the mock committee replied, "or we'll move to Delaware."
Sklar -- as Weaver -- then held a gun to the "governor's head, demanding total deregulation. "No tough stuff on me," the governor said. "After all, I come from a blue blood law firm. I know what economic development means to the wealthy."
Weaver's very name has been used to describe a particular form of legislative behavior. "Weaverized," according to Sklar, describes any legislator whose reformist zeal has been cooled by heavy lobbying. Weaver smiles at the term. "Steve just doesn't like banks," he says. "I don't know why; he just doesn't."
The antibanking forces, led by Sklar, sought to petition the regulation bill from Rummage's committee, a strategy that is rarely tried and seldom succeeds. In this case, it failed by one vote on a 56-to-56 tie, and, everyone agreed, the bankers were protected by the hallowed House system under which committees, right or wrong, traditionally are upheld.
"Mostly, it's been a defensive year," said Weaver. "There have been an awful lot of restrictive bills we felt it necessary to oppose."
A bill backed by Attorney General Sachs that would have explicitly required banks to disclose a wide range of financial information to the state's banking commissioner died in committee, at Weaver's behest. Then the House killed a proposal that would have required out-of-state banks to abide by Maryland usury limits.
Yet another measure requiring banks to return customers' checks -- a longstanding practice some banks are beginning to abandon -- passed the House but was amended in a Senate committee, again with Weaver's intervention. "It was totally gutted," said Del. Sher, sponsor of the bill banning "truncation," as it is known in banking circles.
"They took everything of mine out of the bill," Sher complained of the Senate Economic Affairs Committee, which adopted an amendment allowing banks to abandon check returning if they maintain a microfilm file available to the customer. "We can live with it," said Weaver.
"Banking legislation is really very dull, when you come down to it," said Weaver on Saturday, watching a Senate filibuster over use of eyedrops several hours after another filibuster over racing. "Banking doesn't have the pizazz of racetracks . . . or eyedrops."