Rubin Backs Bank Bill

Treasury Secretary Robert E. Rubin will attend the unveiling today of a bill overhauling U.S. bank laws, signaling that the Clinton administration is ready to back legislation that allows banks, securities and insurance firms to join forces.

Rubin will join Rep. John J. LaFalce (D-N.Y.), the senior Democrat on the House Banking Committee, to promote the legislation, which, like two alternative measures backed by Republicans, would permit Citigroup to retain its Travelers insurance underwriting business that it would otherwise be forced to sell under existing law.

Rubin’s endorsement would mean the administration has thrown its support behind a specific banking bill, which it didn’t do last year. Banking committee leaders in both the House and Senate are about to push forward with legislation overturning the so-called Glass-Steagall Act, the 1933 law that separates banks from securities firms and insurance companies. In fact, executives of Merrill Lynch & Co., Bank One Corp. and Aetna Inc., which support changes, are scheduled to testify before the committee on that subject today.