DC. MEMBER Charlene Drew Jarvis's letter, printed elsewhere on this page today, places the blame for the Latin Investment Corp. debacle squarely on the shoulders of the Office of Banking and Financial Institutions, the Corporation Counsel and outgoing Mayor Marion S. Barry Jr. We are in agreement with much of what Mrs. Jarvis has to say about the role of those agencies and the mayor. She is wide of the mark, however, when she accuses us of according her "direct responsibility for the failure of multiple local and federal government agencies to investigate and close down the illegal 'banking' activities of the Latin Investment Corp." The editorial she refers to did criticize those District agencies and the U.S. Attorney and Internal Revenue Service for ineptitude, indifference and negligence in the handling of Latin Investment Corp. -- but not Mrs. Jarvis.
It is not fair or complete, however, to close out the topic by glossing over the critical role played by Mrs. Jarvis in the development or stifling of the Office of Banking and Financial Institutions. For on the matter of who has strong influence over banking decisions in the District, Mrs. Jarvis is being too modest. Unlike any other jurisdiction in the nation, the District requires that banks seeking charters in this city to be approved by the banking superintendent and the D.C. Council. And when it comes to the council and oversight of local banking issues, the responsible parties are Mrs. Jarvis and her committee on housing and economic development.
Mrs. Jarvis has made it clear in the past that she opposes any provision to remove her committee and the council from the bank-charter approval process, although banking regulators and legal experts who have looked at the arrangement call it unworkable and unsound. Even candidates for the banking superintendent's job took a look at the way it was established and turned it down. One candidate, Howard B. Brown, state banking commissioner of Connecticut, backed off saying "the superintendent was subject to the whims of the council." Edward D. Irons, another candidate who ignored the warnings, quit last June after four years, never having gained control over banking issues or the full regulatory authority that he sought. Today that office is a toothless tiger.
Mrs. Jarvis now has an opportunity to remedy that problem. On Thursday Mayor Barry sent to the council the long-delayed revision and expansion of District banking laws. Some provisions will be extremely useful in filling enforcement and regulatory gaps and should be enacted without delay. Other provisions may require more study or outright defeat. It is within the council's and Mrs. Jarvis's power to do both, including removing their stranglehold on the bank charter approval process. That should be done. The Latin Investment Corp. disaster is reason enough.