The persistent White House defense of Bert Lance's banking career - that it was "normal" or "typical of small-town Southern bankers" - is disputed by federal bank regulators, the American Bankers Association and several small-town bankers interviewed in recent days by The Washington Post.
"Bert Lance has given the banking business a black eye," said the president of one moderate-sized Midwestern bank. This banker said Lance's adventurous banking career had little in common with the conservative style adopted by many in the banking industry.
The most disputed aspect of Lance's banking practices - at least of those thus far revealed in official government investigations - is the large over-drafts permitted to him, his wife and in-laws while Lance was chairman of the First National Bank of Calhoun, Ga.
Lance has called those overdrafts "typical of Southern banking practice" and "a very normal practice."
An official spokesman for the American Bankers Association said of the overdrafts yesterday: "We don't see that as normal or typical, whether it's Southern or Northern or whatever." The ABA spokesman called those overdrafts "very untypical, very unnoramal."
"I've seen genuine shock (among bankers)," the spokesman added, "at the size of those overdrafts."
(Lance, his wife and her relatives overdrew accounts in the Calhoun bank by as much as $450,000, in total. Two accounts for Lance's unsuccessful 1974 gubernatorial campaign ran up additional overdrafts of more than $150,000. Some of these accounts remained overdrawn for weeks and months, with no interest charges until these were demanded by federal bank examiners.)
President Carter, Lance and other administration spokesmen have said repeatedly that none of Lance's banking practices revealed so far were illegal, "or even unethical," in President Carter's phrase.
This too was disputed by banking industry sources who were interviewed. One banker noted that the report by the comptroller of the currency on Lance's affairs said the overdrafts "exceeded the limits put on extensions of credit to bank executive officers" by federal law. The comptrollers also reported that bank examiners "did not list these overdrafts as possible violations" of the law, but did not explain why.
The fact that other bankers are willing to criticize Lance now might be interpreted as self-serving, but their assertions that Lance's practices were atypical is supported by more detached statistical information and the comments of government bank examiners.
One example was an exhaustive General Accounting Office survey of bank regulation by three federal agencies completed this year. The GAO said federal examiners found violations of rules governing the extension of credit to a bank's own officers (the rules the comptroller said Lance appeared to violate) at 11 per cent of the national banks examined.
John J. Early, director of bank supervision for the Federal Deposit Insurance Corp., said in an interview that "sizable" overdrafts to a bank's own officers would be a subject for action by examiners.
"We'd like to deal with them. They'd get our attention," Early said of such overdrafts.
(Early declined to discuss specifics of the Lane affair, but agreed to talk about bank regulation generally.)
Another source who formerly served as a federal bank examiner said the allegation that country banks are typically run rather loosely is not true. "Untold numbers" of country banks are run strictly - often too strictly for their or their communities' own good, this source said.
Another aspect of Lance's banking practices that provoked comment from other bankers was his failure - as reported by the comptroller of the currency - to inform fellow directors at the Calhoun bank and at the National Bank of Georgia about 50 different loans made for personal purposes during the 1970s.
Federal law stipulates that an executive officer of a bank must report in writing to his fellow directors when he borrows money, except in a few specified cases. Lance failed to report the overwhelming majority of his outside borrowings, the comptroller said. (The law provides no penalty for violation of this provision.)
"It's absolutely shocking that Lance would not report loans to his directors," the president of a small Eastern bank said. "It's not like a serious crime - but on the other hand, it's one thing to be lenient about slips of mind, but I have never heard of a pattern extending over many years of not reporting so many loans," this banker said.
He added: "The black letter law was apparently ignored over an entire (banking) career."
Asked if revelations about Lance's banking practices were damaging to the banking industry, the spokesman for the American Bankers Association said he thought "it hasn't hurt yet."
"I don't think the American public has swallowed the assertion that this is common to every banker," the ABA spokesman said.