Business Rallies Behind Banking Reform Bill

Top Wall Street players expressed broad support Wednesday for a bill to overhaul the Depression-era banking laws even as a new rift opened up among lawmakers.

Leaders of the banking, securities and insurance industries coalesced around H.R. 10, legislation resurrected from last year’s Congress that would allow one-stop shopping for a host of financial services.

“The outstanding issues are few and resolvable,” David Komansky, chairman and chief executive of Merrill Lynch & Co., said in testimony to the House Banking Committee.

“Unlike years past, when legislative efforts deadlocked due to inter-industry turf fights aimed at forestalling competition, there is no disagreement in the industry about the basic structure of H.R. 10,” he said.

The bill, championed by House Banking Committee Chairman James A. Leach (R-Iowa), passed the House last year but died in the Senate.

While that bill has again drawn support from many lawmakers, Rep. John J. LaFalce of New York, ranking Democrat on the banking panel, urged Congress to try a new approach and said he would offer competing legislation.

LaFalce touted his bill as one that would gain the backing of President Clinton, who last year opposed some regulatory provisions in H.R. 10 and repeatedly threatened to veto it.

But by offering up an alternative financial services proposal, LaFalce could stoke further debate on the subject, especially since the Treasury Department and the Federal Reserve have been at loggerheads over the bank regulatory provisions.

Meanwhile, industry leaders pressed Congress to move forward with H.R. 10 because it was the one bill that achieved a “cease-fire” within the private sector on bank reform, an issue that has been kicking around for decades.

As business rallied around the Leach bill, Treasury Secretary Robert E. Rubin appeared with LaFalce as the lawmaker unveiled his rival legislation.