Congress will take another crack at financial modernization legislation next year now that Republicans have retained control of both the House and the Senate.

House Banking Committee Chairman Jim Leach, R-Iowa, who survived a close race in Tuesday's elections, has vowed to renew his bid to repeal the Glass-Steagall Act when Congress reconvenes in January.

Senate Banking Committee Chairman Alfonse M. D'Amato, R-N.Y., recently pledged to take up the issue after two years of sitting on the sidelines. Sen. D'Amato did not face reelection in Tuesday's ballot.

In a telephone interview Wednesday, Rep. Leach gave only lukewarm support for Sen. D'Amato's overture. "I think it means there will be progress on the issue, but it's clear to me there is no inevitability" of enacting legislation, he said. The two lawmakers have significant differences on financial modernization.

Rep. Leach was at home in southeast Iowa after winning his 11th term in the House of Representatives with 52% of the vote.

"It was a feisty race," he said. "Considering the outside forces that came in to support my opponent, I feel very appreciative of the public's response."

He was one of only two committee veterans who faced tough races. His opponent, former state senator Bob Rush, received strong labor union backing as well as campaign visits from President Clinton, Vice President Gore, and House Minority Leader Richard Gephardt.

Rep. Leach said it is "premature" to predict how the narrowed Republican margin in the House will impact banking legislation, but said he hoped for a less partisan atmosphere.

The only Senate Banking Committee members to face the electorate won. Democrat John Kerry beat Massachusetts Governor William Weld with 52% of the vote, while Republican Phil Gramm of Texas defeated Victor Morales with 55% of the ballots.

For House Banking Committee members, Tuesday's returns mirrored the national election, with freshman Republicans taking the brunt of the party's losses. Four of the GOP freshman were clear losers in Tuesday's vote - Rep. Dick Chrysler of Michigan, Rep. Frank Cremeans of Ohio, Rep. Fred Heineman of North Carolina, and Rep. Jack Metcalf of Washington.

Republicans could lose other freshman panel members, as well. Rep. Dick Stockman of Texas received only 49% of the vote and will face Democrat Nick Lampson in a runoff.

Democrats will lose one current committee member - Rep. Bill Orton of Utah, who lost to venture capitalist Christopher Cannon. Texas freshman Ken Bentsen, however, must win a runoff against Republican Dolly Madison McKenna. Rep. Bentsen topped a field of 11 candidates, but won only 34% of the vote.

Aside from Rep. Orton, committee veterans made strong showings: 31 of the 32 experienced members seeking reelection won their bids.

Their strong performance is a positive sign for the industry because leaders in both parties favor expansion of bank powers, said Robert R. Davis, director of government relations for America's Community Bankers.

"We feel we're in good shape going into next year," he said. "We expect to see the same people in key leadership positions."

Because many veterans won by large margins - 25 of them won 60% or more of the vote - they will be less likely to be swayed by pressure from party leaders or industry trade groups, said lobbyist Richard F. Hohlt. "They are going to be a pretty independent bunch of people," he said.

The lineup of the House Banking Committee won't be set until December, and many reelected freshmen are expected to shift to new panels.

"There will be some changes among the junior members," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "But it's doubtful that they would have a huge impact."

Mr. Yingling predicted that the committee will be split among conservative Republicans and the most liberal Democrats in Congress.

He said that Democrats would again try to block efforts to roll pack pro-consumer laws and the Community Reinvestment Act.

Lobbyists lamented the loss of Rep. Orton, who voted with Republicans to roll back regulatory burdens. "I wish the entire committee had adopted his vision," said Annie Hall, lobbyist for Columbus, Ohio-based Banc One Corp. "He supported the free-market and was very fair."

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