Yes, the banking industry is mired in regulations, many of which are of recent vintage and clear cases of overkill. And, yes, it has been unsuccessful in its efforts to win new powers and change outdated legislation.

There is, however, a silver lining in the regulatory clouds. Six important lessons have been learned about what bankers should and shouldn't do in the future when confronted by potentially damaging legislative and regulatory proposals.

More important, past sins of omission and commission can be corrected very easily.

* Don't just oppose a legislative proposal; strongly promote a counterproposal.

This guideline takes on added weight when public safety or quality of service is involved because opposition can be perceived as a "public be damned" policy.

Assuming there are legitimate safety or quality concerns, the challenge for banks is to show they recognize the need for consumer protection and that they offer a better way to achieve the desired goal.

Subsequent arguments should then focus more on why the bank's approach will work than on why the other side's solution won't.

In short, being positive casts one in a more favorable light than being negative. And a nay-saying approach can overshadow banking's concern for consumer or community problems.

* Don't base arguments on how a proposed measure will harm banks. Concentrate instead on how it will affect the public.

Bankers may be the kindest people to walk the earth, but, sad to say, the public is not going to lose sleep if a legislative act costs banks million of dollars.

If bankers want the public's support, they have to talk consumer gains, not banker pains. Banks have tried the later approach numerous times in efforts to eliminate Glass-Steagall and gain entry into insurance. It hasn't worked.

The first approach has, though. In the early 1980s when Congress attempted to capture income taxes due on consumer savings via deductions from accounts throughout the year, the American Bankers Association's opposition dealt primarily with the impact on consumers. The trade group took its message to the public, which, in turn, acted on the ABA's request for a consumer message to legislators. Washington was soon flooded with hostile cards and letters, and the withholding proposal was junked shortly thereafter.

* Don't think a municipal issue is confined to a municipality's borders.

Local ordinances have inspired similar legislation at the state and federal levels. If deemed harmful to banking, they should be confronted in the early stages and, if necessary, with the resources of a state or national trade association. Bankers should not say, "It's not my concern if it's not in my town," because they could soon find the measure on their door-step -- with momentum behind it.

* Don't save your best lobbying and communications efforts until after the other side has taken its case to the public. There's a lot to be said for momentum. The proponents of bank-bashing (or bank-aggravating) measures often get early starts in their lobbying and press relations efforts. This gives them a lead over the banks that grows and grows. It also gives them an overwhelming share of the print space and air time devoted to the subject.

Being quoted in the last paragraph of a lengthy news article - the remainder of which covers the other side's arguments - simply is not the textbook way to win a public opinion war.

Communications aggressiveness - backed by facts - can achieve public opinion gains. The New York State Bankers Association demonstrated this in 1979 after a wave of bank robberies had rocked the New York City metropolitan area.

Amid rumblings at City Hall the bank branches might require redesigning, and accusations that the banking industry cared more about esthetics than safety, the state association initiated more than a dozen media interviews.

Its executive vice president expressed the industry's concerns about the crime wave, explained in broad terms how security was countering robbery attempts and disputed the contention that the absence of teller cages invited crime. Rumblings about forcing design changes on the banks soon stopped. So did the crime wave.

* Don't go it alone.

As the ABA demonstrated on the withholding issue, allies help. And the absence of allies hurts, especially on a safety or quality of service issue. For example, recent debates on automatic teller machine safety measures gave the impression that the battle was between bankers and those who favor safety. Such an impression doesn't generate favorable odds for the bankers.

Moreover, a go-it-alone approach makes voting for the bankers' position difficult even for those legislators who are favorably inclined toward it. As federal and state lawmakers have said to bankers in the past: "Don't you tell me what you want. Have your customers tell me what you want."

* Have senior officials, not legal or technical representatives, speak on behalf of banks.

Legislators and regulators have complained in the past when middle-management bankers have served as industry point men at committee hearings and other forums.

It's not that the lawmakers are snobs but rather that an absence of heavy hitters makes them question banking's interest in the subject at hand.

Sure, keep the legal and technical experts on hand to answer specific questions. But have senior executives make the major points. They have prestige and clout.

It worked for Lee Iacoca.

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