First, we survived unscathed.

As the new year arrived in 2000, credit cards worked, automated teller machines dispensed cash, the automated clearing house moved money, and bankers around the globe breathed a sigh of relief that the Y2K bug had failed to bite.

When our exuberance waned — as it did quickly — we went back to business.

Bankers and nonbankers alike tried to come to grips with the effects of Gramm-Leach-Bliley, which took effect at the end of 1999. While activity under the new law would turn out to be more incremental than torrential, especially when it came to insurance companies, the first deals under its auspices emerged right away.

One was no surprise: though Travelers Group and Citicorp had cemented their marriage in 1998, the law meant the company would be able to hold onto its insurance underwriting operation. The other was more unexpected: In mid-January, Charles Schwab announced it was buying U.S. Trust Corp.; not only did this merger make GLB history, but it reinforced to the financial industry that online brokerages (and none more so than Schwab) are a force to be reckoned with.

While all kinds of nonbank companies spent the year edging into banking businesses — from United Parcel to the automaker BMW — it was the online brokers that seemed to make the most progress in drawing borrowers and depositors from banks. E-Trade Group Inc. firmly established its banking arm, bought a network of ATMs, and began rolling out E-Trade-branded financial services kiosks.

Merril Lynch also continued to sidle closer to banks’ turf, offering customers a ramped-up FDIC-insured sweep account that not incidentally allowed it to provide low-cost funding to its other business lines.

To some, the brokerages were leaving banks in the dust when it came to picking up newly-rich and Internet-savvy customers.

Industry strategists eased up on the breathless talk of financial supermarkets and one-stop shops. Cross-selling still got lots of attention, but claims were a little more measured this year. In fact, by year-end, corporate cross-selling seemed to be garnering more mind-share than consumer cross-selling.

Not that the banks weren’t slugging away. Though merger activity was at a dull roar compared, say, with 1998, many banks did gain power and might through acquisitions. Chase Manhattan’s deal for J.P. Morgan, which is expected to close Sunday, not only brought cachet to what was once considered a brown-suit bank, but also put it in prime position to extend its services to the affluent. In a sea change for the new year, the blended company will begin trading under the symbol JPM on Jan. 2.

Another acquisition that will usher in an unfamiliar name in the new year was Credit Suisse First Boston’s deal for Donaldson, Lufkin & Jenrette, which will replace the familiar DLJ acronym with the less mellifluous CSFB.

Some of this year’s deals came with a load of drama. Citigroup Inc. took heat for its decision to buy Associates First Capital Corp., which some community groups criticize as a predatory lender. Wells Fargo won its bid for First Security Corp. only after the latter’s deal with Zions Bancorp fizzled. North Fork and FleetBoston played a game of tug-of-war in trying to acquire Dime. And in what was easily the most poignant merger of the year, two brothers — Jerry and Jack Grundhofer — merged the banks they lead, Firstar and U.S. Bancorp.

These were tough times for home lenders, who scrambled to meet the challenges of rising interest rates and falling origination volume. Many mortgage operations cut staff, shifted their product mix toward adjustable-rate mortgages, and reduced the prices on their loans.

On the technology front, the year of the dot-com became the year of the not-com as Internet firms struggled for a business case. Banks, meanwhile, solidified their positions as online service providers. Outcry early in the year over screen scraping subsided as account aggregation caught on, and more and more banks lined up to provide the service. Bank-issued smart cards made their U.S. debut, digital signatures gained the weight of law, wireless technology came into vogue, and efforts to introduce electronic bill presentment moved forward.

As the Internet facilitated more sophisticated marketing techniques, banks grappled with privacy issues. Chase Manhattan Corp. and U.S. Bancorp took their stumbles when state attorneys general faulted their information-sharing practices, and those banks and others tightened their policies.

On the cards side of the business, banks scored a subtle and gradual victory as the debate over ATM fees waned — with banks as the victors. And a summer potboiler took place in a courtroom in downtown Manhattan, where leading figures in the credit card industry all testified in the Justice Department’s antitrust suit against Visa and MasterCard. Unless the judge issues her decision this week, that case, along with a separate lawsuit filed by retailers against the card associations, will not be resolved until 2001.

There were goodbyes: John Reed retired from Citi; John McCoy and Verne Istock retired from Bank One, and Edward E. Crutchfield left First Union. Next year, we can look forward to seeing how their successors do: what moves Sanford Weill will make, what kind of improvements G. Kennedy Thompson can achieve. And many eyes will be on Jamie Dimon, the former Citigroup whiz kid who took over Bank One with great expectations. Here’s to a newsy 2001!

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