WASHINGTON - John D. Hawke Jr., the dean of Washington banking lawyers, is in line to be the Treasury Department's next under secretary of domestic finance.
If he is nominated and confirmed, banking would gain another key ally in the Clinton administration. Mr. Hawke could be expected to endorse wider securities and insurance powers for banks as well as a reduction in the industry's regulatory burden.
"We think he would be terrific," said Edward L. Yingling, executive director of government relations at the American Bankers Association. "He has great knowledge of what financial services entail, and he has been the premier banking lawyer in town for decades."
Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America, agreed.
"Jerry is superbly qualified," Mr. Guenther said. "He is an astute heavyweight who will bring great strength to the Treasury Department."
Treasury is the industry's point of access into the administration, and the under secretary for domestic finance is the most senior official who deals regularly with banking issues.
Moving into Treasury's No. 3 slot, the 61-year-old senior partner at Arnold & Porter law firm here would replace Frank Newman who moved up to deputy Treasury secretary in August after investment banker Roger Altman resigned.
Mr. Newman, who was Bank of America's chief economist, met Mr. Hawke while the lawyer was working on the San Francisco giant's purchase of Security Pacific Bank in 1992.
Mr. Hawke, who is known as Jerry, is no newcomer to government or the Clinton administration.
He was the Federal Reserve Board's general counsel from 1975 to 1978. President Clinton considered Mr. Hawke for chairman of the Federal Deposit Insurance Corp. before nominating Ricki Tigert in November 1993.
Mr. Hawke started his legal career in 1962 with Arnold & Porter and has represented banks in a variety of commercial and regulatory matters.
His greatest litigation triumph came before the Supreme Court in 1986. Winning 8-0 in the Dimension case, Mr. Hawke opened the door for the creation of "nonbank banks."
Though talk of the appointment was widespread Thursday, Mr. Hawke has not been formally nominated. According to administration sources, Mr. Hawke has been selected for the post and routine background checks are being made. An official announcement is expected next month.
Mr. Hawke is a founding member of the Shadow Financial Regulatory Committee, a dozen academics, lawyers, and a banker who joined forces in 1986 to keep tabs on the banking regulators.
The Shadow Committee is credited with "pioneering prompt corrective action," the rules that impose increasingly severe penalties on a bank as its capital declines.
But the group often takes controversial stands at its quarterly meetings. For example in December, the Shadow Committee endorsed the repeal of the Community Reinvestment Act, said restrictions should be lifted on bank product offerings, and announced that banks should not have to pay for any part of the thrift industry's cleanup.
Although the committee is apolitical, Treasury is not. That means Mr. Hawke, who is a low-key Shadow member, may not voice such extreme positions when he gets to his new job.
