Lawmakers will travel to Wall Street Wednesday in a last-ditch effort to rally the heads of the nation's largest financial services firms behind foundering reform legislation.

Merrill Lynch & Co. is to host a luncheon at its headquarters with key House Republicans and about two dozen executives from the banking, insurance, and securities industries.

Sources said the VIP list includes: Walter V. Shipley, chairman of Chase Manhattan Corp.; David A. Coulter, chairman of BankAmerica Corp.; Richard L. Huber, president of Aetna; and Philip J. Purcell, chairman of Morgan Stanley, Dean Witter, Discover & Co.

House Republican Conference Chairman John A. Boehner, R-Ohio, and two key subcommittee leaders-Rep. Michael G. Oxley, R-Ohio, and Rep. Marge Roukema, R-N.J.- plan to address the executives.

Such a session is rare, if not unprecedented. Even so, observers say prospects are grim that it will break the impasse that kept the sweeping financial reform bill from the House floor last year.

"It is dead, dead, dead this year," said Bert Ely, a financial services consultant in Alexandria, Va. "Psychologically, people have given up on it."

"We can all agree conceptually," said Annie Hall, director of public policy for Banc One Corp. "We cannot agree on the legislative language."

Besides the stifling industry politics, the Asian financial crisis and other outside factors could interfere with passage of the complex legislation.

Fights over funding and conditions for U.S. bailouts of Asian economies will seriously distract the banking committees in 1998, said Karen Shaw Petrou, president of the Washington consulting firm ISD/Shaw Inc.

And because it is an election year, lawmakers naturally will gravitate toward legislation involving automated teller machine fees, credit cards, predatory mortgage lending practices, and other populist concerns, she said. "I don't think there is room on a busy schedule for a bill that has a lot of problems," Ms. Petrou said.

Another wild card is the imminently expected Supreme Court decision on the banking industry's lawsuit against expansion of credit union membership. The loser might try to tack a legislative solution onto the reform bill, which could bog it down further.

Others were more bullish, although no one predicted a bill would pass the House and Senate this year.

"There has been remarkable progress, much more progress than most people are willing to recognize," said Bruce E. Thompson Jr., vice president of government relations for Merrill Lynch. He predicted House passage early this year, which would leave the Senate time to consider the bill before adjournment in early fall.

Lawmakers ultimately will have to act because "the market has gotten way out ahead of the policy set by Congress," said Samuel J. Baptista, president of the Financial Services Council.

Rep. Roukema agreed. "I do believe our leadership is concluding that and is going to do what it can," she said. "They are recognizing this should be a turning-point year."

Last year, the House Banking and Commerce committees passed conflicting versions of a bill that would topple decades-old legal barriers separating the financial services industries. Progress has been stymied by disputes over bank insurance and securities sales as well as turf battles among regulators.

The biggest obstacle, however, has been the banking industry's insistence that the thrift charter be eliminated, said John D. Hawke Jr., the Treasury Department's under secretary for domestic finance.

"We have the potential for major gridlock here," he said. "The bankers have made this a holy war."

The American Bankers Association doggedly persists in its demand that any bill keep provisions that would eliminate the thrift charter. "It cannot pass if they are removed," said Edward L. Yingling, the ABA's chief lobbyist. "If you dropped the thrift title, then we are opposed to the bill."

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