The way Congress has addressed financial modernization and the substance of the law it will likely enact leads one to the conclusion that the banking industry has not fared as well as might have been hoped. Our inability to reach broad, industrywide consensus in a timely manner sapped our lobbying efforts of their effectiveness.

When the bill becomes law, we should look back to ask ourselves what lessons we have learned and where we should go in the future. The need for reflection is even greater following the termination of merger talks by the American Bankers Association and America's Community Bankers.

During last year's consideration of HR 10, the directors of the North Carolina Bankers Association adopted a resolution called the "One-One-One" proposal. Our organization went on record as urging the formation of one trade association to represent the banking industry at the national level, one national bank charter combining the best attributes of the existing bank and thrift charters, and the merger of the bank and thrift insurance funds into one under the Federal Deposit Insurance Corp.

The membership of our association includes institutions that have joined the ABA, ACB, and Independent Community Bankers of America, and some belong to more than one. How much more effective might we have been with a single forum developing positions and strategies we could all embrace and then promote with a single, united voice? We believe the difference in outcome would have been dramatic.

At various stages of the financial reform discussion in recent years, charter modernization was an agenda item. As the legislation progressed, however, the structural focus moved away from the bank charter and more toward affiliates and subsidiaries. Following complexities involved in the passage of broad modernization legislation, it may still be possible to ask Congress to consider the narrower charter issue.

As for insurance fund consolidation, the chairman of the FDIC and her immediate predecessor both called for a merger. It is time that the industry added its voice to that call and helped make a single insurance fund a reality.

Passage of the financial modernization bill may prove to be a historic event in some regards, but it will have only a minor impact on many of the banks in our country. The simple recommendations put forth here could well be more meaningful to those institutions than everything contained in the several hundred pages of the new law.

Ernest C. Roessler

Chairman,

North Carolina Bankers Association

Chairman, president, CEO,

Central Carolina Bank,

Durham, N.C.

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