A gathering of industry heavyweights this week was the first step in "a frontal assault" against the political logjam blocking financial services reform legislation, a key Republican congressman said.
"We have had to take on the naysayers, the hand-wringers, and the bed- wetters for the last several months," Rep. Michael G. Oxley, R-Ohio, said late Wednesday. He was fresh from a meeting with 19 banking, insurance, and securities executives in New York. "Now is the time to act," he added.
Top executives from Bank of America, Fleet Financial Group, Morgan Stanley, Dean Witter, Discover & Co., Massachusetts Mutual Life Insurance, and other pillars of finance pledged support for legislation and urged quick action by Congress in a joint statement after their two-hour meeting.
"They said it is time to put aside differences and move forward," said Bruce E. Thompson Jr., director of government relations at Merrill Lynch & Co., which played host to the meeting in its New York headquarters.
Skeptics replied that the meeting did nothing to mend the sharp divisions between rival financial sectors over insurance and securities sales, regulatory powers, and the thrift charter.
"No one, to my knowledge, has put anything on the table that in any way begins to resolve these substantive issues," said Bert Ely, a financial services consultant in Alexandria, Va.
Paul A. Schosberg, president of America's Community Bankers, described the outcome of the meeting as "predictable and unremarkable."
"What else is new?" Mr. Schosberg asked. Tough questions remain unanswered, such as how the players define reform and what steps are necessary to make it happen, he said.
Supporters insisted that so-called financial modernization legislation, which stalled last fall because of differences between Banking and Commerce committee versions, has captured increasing interest from the House leadership.
The financial services executives who met at Merrill Lynch this week plan to send a letter by Monday urging quick passage to Speaker Newt Gingrich, R-Ga., and other top House Republicans.
Rep. Oxley, chairman of the House Commerce Committee's finance subcommittee, said he wants to bring a compromise bill to the House floor by late February or early March.
During a working lunch, House Republican Conference Chairman John A. Boehner, R-Ohio, and Rep. Oxley advised the corporate chieftains Wednesday that they need to rein in their warring lobbyists in Washington.
Rep. Oxley in an interview described the primary impediment to legislation as "a disconnect between the CEOs and some of the trade associations and some of the lobbyists in Washington."
The lawmaker said he sensed a "strong feeling of agreement among the parties present" at the meeting but added that "compromises are going to have to be made."
He dismissed predictions by many observers that the bailout of Asian economies and election-year politics make passage unlikely even if industry differences are smoothed over.
"Those are speed bumps," he said. "They are not walls."
Not all of the prominent players in the reform battle were represented at the meeting.
Rep. Marge Roukema, R-N.J., chairwoman of the House Banking Committee's financial institutions subcommittee, said she was upset that Rep. Boehner refused her request to attend the meeting. "It would have been far more advantageous if someone, like myself, had represented Mr. Oxley's parallel on the Banking Committee," she said. "I expressed my opinion most directly and strongly."
She said the reasons for her not being invited were unclear but that when she reached him Tuesday, Rep. Boehner said it was too late to add guests and that others had also been refused.