The long-overdue bankruptcy reform legislation seems like the "low hanging fruit" of my youth. It was passed by Congress last year, but vetoed by President Clinton. Now it's making quick progress and should be pluckable early in this Congress, despite some Democrat reservations. And President Bush will not veto the legislation. Elsewhere in the orchard, as occurs about once every decade or generation, the tax tree is ripening to allow a full harvesting of its rare and desirable fruit—a major tax cut. This will pass later this year. The content of the legislation and the strategy to secure its passage are still being defined. Possibly, look for more than one bill. A financial services industry plum—401(k) and IRA sweeteners—apparently won't make this year's crop. Senate Majority Leader Trent Lott (R-MS), joined by Finance Committee powerhouse Phil Gramm (R-TX), has stated that these savings incentives will be put off until next year. The privacy title of Gramm-Leach-Bliley is a bit of a sour cherry, increasing banking's regulatory burden. The financial services industry is facing a prickly time coping with the new privacy regulations. The Republican leadership probably will ensure that a new privacy bill isn't ripe for the picking in this Congress.Similarly, Chairman Gramm's pledge to return to the politically charged banking and commerce issue (allowing Wal-Mart to buy a bank) probably won't ripen in the next two years. The Federal Reserve/Treasury merchant banking regulations give the bigger financial players much of what they want in terms of controlling commercial firms. And the 50-50 power split in the Senate makes a frontal attack on this issue politically difficult. To community bankers, one of the sweetest fruits would be a bill doubling FDIC insurance coverage to $200,000. But that fruit is fairly high up the tree, despite arguments laid out meticulously and courageously by FDIC Chairman Donna Tanoue. The fruit not only would be tasty, but would be nourishing for the future growth of many community banks, which face growing liquidity problems as core deposits erode. Such erosion could be halted by increased levels of insurance coverage. Hill support is growing but the administration and legislators won't get serious unless they face a triggering event. That event is likely to occur next year because there's a good chance the reserves of the FDIC-BIF will drop below 1.25% of insured deposits. That would trigger the imposition of insurance premiums.For banks and thrifts, it would be a bitter fruit, indeed, because they would be paying the costs of the so-called free-riders.Merrill Lynch & Co., for example, has accumulated more than $50 billion in insured deposits without ever having paid anything into the fund. And while banks are limited to $100,000 insurance coverage per account, Merrill, which owns two banks, has been offering elite CMA customers $200,000 in coverage. Another unpleasant taste stems from the economic slowdown and its impact on asset quality. American agriculture continues to confront abysmally low prices and higher energy and fertilizer costs. Assistance from three separate emergency farm aid packages was the only thing that prevented another major agricultural credit crisis. Now Congress faces the dual challenge of writing another farm aid bill and rewriting the Freedom to Farm Act that expires in 2002. Apples and oranges deserve to be fairly priced.And finally, the grafting together of major banks into giant organizations has moved the banking industry toward bifurcation, with small community banks on one side and giants on the other. As a result, the banking regulatory and supervisory structure is also moving toward bifurcation. Clearly, non-complex banks should be under different and lighter regulatory and supervisory requirements than large complex banking organizations.

About the Writer Kenneth A. Guenther is executive vice president at the Independent Community Bankers of America, where he has been for 20 years.

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