Congress is making its most serious run ever at repealing the Glass- Steagall Act, and the American Bankers Association's top gun on the issue is barred by law from talking to lawmakers.
But that's not a problem, said Larry LaRocco, a former Democratic member of Congress from Idaho who now heads the ABA Securities Association. The ABA affiliate - known as ABASA, and pronounced ah-BASS-ah - will provide information and analysis for the mother trade group, and that's more than enough, he said.
In 1991, when Congress passed a banking law widely reviled by bankers, "some thought that issues popped up all of a sudden and that the industry was not prepared to deal with them," Mr. LaRocco said.
"So we want to have everything on the table and fully analyzed," he added.
Members of Congress are barred by law from lobbying their former colleagues for a year after leaving office. But Mr. LaRocco, a former stockbroker, isn't planning to spend time twisting arms even after the ban expires.
"I will be very content to stay at 1120 Connecticut Ave. (ABA headquarters) and build the organization," he said.
Edward L. Yingling, the organization's chief lobbyist, said Mr. LaRocco may be asked to lobby "on a targeted basis" if he has a particularly good relationship with a member.
But for the most part, the new securities affiliate will make use of the ABA's sizable lobbying team and stick to providing research and analysis.
"They were particularly helpful on the Leach bill," said Mr. Yingling, referring to Rep. Jim Leach's Glass-Steagall repeal bill. "Their recommendations became the ABA's list of amendments."
In particular, Mr. Yingling cited the group's concerns about a section of the bill that would have required most bank securities powers to be handled through separately capitalized affiliates, rather than through the bank itself.
Rep. Leach, the House Banking Committee chairman, compromised with the industry and agreed that most existing activities could continue to be offered through the bank.
Mr. LaRocco was a well-regarded member of Congress who served on the banking committee and who had begun climbing the Democratic leadership ranks during his four years on Capitol Hill. That has generated some grumbling among Republicans who question why the ABA did not tap someone with GOP ties.
"That's really a nonissue," Mr. LaRocco responds. "What the ABA wanted was someone who knew the issues, could put together an organization and make it grow."
The securities affiliate has begun to grow. Its members include 22 of the nation's big banks, nearly all the potential market for the organization.
"There are about 25 banks with section 20 affiliates," said Mr. LaRocco, referring to bank securities units formed under section 20 of the Glass- Steagall Act. "They are all potential members."
Each member institution pays $15,000 a year in dues. With subsidies from the ABA, Mr. LaRocco said he has a half-million-dollar budget to work with.
The affiliate uses the ABA's lobbying and staff resources - its general counsel is Sarah A. Miller, an ABA lawyer - though Mr. LaRocco also hired an outside counsel: John Dugan, an assistant Treasury secretary in the Bush administration.
The securities affiliate plans to stay focused on wholesale banking issues, leaving retail matters for the mother organization.
And while it will be working on a number of other matters of interest to large wholesale banks, including questions about derivatives, for the near term, Mr. LaRocco said, "Glass-Steagall will be two-thirds of what we do."