The Glass-Steagall Act will finally be repealed and bank powers expanded in the next session if congressional leaders take charge of the debate, Rep. Richard Baker, R-La., predicted Monday.

"It's a question of the leadership getting involved," he said. "I think it will happen."

Speaking to reporters after a speech to the Online Banking Association, Rep. Baker said trade groups have been able to block legislation because many lawmakers don't have strong personal views on restructuring the financial marketplace.

Without direction from House Speaker Newt Gingrich and Senate Majority Leader Trent Lott, many lawmakers are reluctant to upset key lobbyists. "Basically, the leaders need to give members some cover," he said.

The Louisiana Republican predicted Rep. Jim Leach will continue to chair the House Banking Committee if Republicans retain control of Congress next year. Some lobbyists have speculated that Rep. Baker or Rep. Bill McCollum would seek the committee's helm, but both lawmakers have denied they would challenge Rep. Leach.

Because leaders of both parties support financial modernization, Rep. Baker predicted that Glass-Steagall will be repealed even if Democrats win a majority in the next Congress.

In his speech, Rep. Baker said industry groups must work harder to convince Congress that technology has made most financial laws obsolete.

"There are some members of the House Banking Committee who have never even used an ATM card," he said.

In his view, financial firms should be able to offer all types of services.

"These market decisions will find their way to the customer anyway, despite the best attempts of Congress to regulate," said Rep. Baker, who chairs the banking panel's capital markets, securities, and government- sponsored enterprises subcommittee. "Without modernization, it won't be the easiest, the cheapest, or safest way."

To protect the deposit insurance funds from greater risk, Rep. Baker said he wants to limit the government's exposure to any particular depositor.

"The way it works today, you can get as many deposits insured up to $100,000 as you want," he said. "I don't believe that's how the rules were intended."

Another rule Rep. Baker wants to change is the ban on advanced encryption technology exports, which he said hurts U.S. firms developing electronic banking systems.

"The economic value of sophisticated encryption technology far exceeds any security risks that are out there today," he said.

Rep. Baker also said he would oppose any restrictions on ATM surcharges. "Nothing in America is free," he said. "If you want to regulate ATM fees, why don't we do away with ATMs all together. Let's go back to waiting in line at 4 p.m. on Friday - wasn't that fun?"

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