One of the leading proponents of financial services reform, Rep. John A. Boehner, was ousted from the House Republican leadership Wednesday.
Party members chose Rep. J.C. Watts Jr. of Oklahoma to succeed the Ohio lawmaker as House Republican Conference chairman on a 121-to-93 secret ballot.
Rep. Boehner and Speaker Newt Gingrich, who jointly pushed reform legislation through the House in May by one vote, are the two principal House leadership casualties after surprising Democratic gains in the Nov. 3 elections.
Rep. Bob Livingston, R-La., was anointed the Republican choice for speaker but will not officially take over until early January when the full House votes for its next leader.
Industry lobbyists generally agreed the leadership shake-ups in the House-and in the Senate Banking Committee which is getting a new chairman- would slow down enactment of financial reform but disagreed on whether reform already was dead for next year.
Many observers expect Republicans, chastened by their election losses, to focus on popular issues that could provide momentum going into the presidential and congressional elections in 2000.
Indeed, Rep. Livingston and his fellow Republican leaders vowed Wednesday to concentrate on issues that matter to most Americans such as protecting Social Security, cutting taxes, and preserving a patient's right to choose his own doctor.
"They have to deliver legislation that the American people care about and are interested in," said Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America.
"Financial restructuring does not have that kind of political appeal."
Bank One Corp. chief lobbyist Annie Hall said the fate of the reform bill will rest on the ability of supporters to persuade lawmakers that revamping the financial services industry is as important to the general welfare of voters as these other issues, even if it is less sexy.
"I understand that voters don't appreciate that and never will," she said. "It's our job to make sure Congress appreciates that."
The loss of Rep. Boehner may not be significant because Speaker-elect Livingston is expected to rely more on his committee chairmen as lieutenants, said Edward L. Yingling, chief lobbyist for the American Bankers Association.
The heads of the House Banking and Commerce committees backed reform this year but historically feud over its contents.
In general, however, Mr. Yingling lauded the new House leadership as better for bankers because Rep. Gingrich had strongly backed credit union and insurance competitors.
"We feel it is a good team that we can work with," Mr. Yingling said.
"We did not fare as well under Gingrich as we would have liked."
Richard K. Armey, R-Tex., held off three challengers and will remain majority leader.
Majority Whip Tom DeLay, R-Tex., faced no opposition and was reelected.