The lawyer H. Rodgin Coghen, according to the Dec. 7 American Banker, said that in informal discussions with regulators prior to the Mellon-Dreyfus acquisition announcement, "no one said don't do it."

Regulatory underlings don't give the kind of assurances that Mr. Cohen would be able to hang his hat oil. My guess is that Comptroller of the Currency Eugene Ludwig either gave the green light in person, or it was a cut-and-dried deal before such a meeting was held.

Not even Treasury Secretary Lloyd Bentsen could approve such a policy departure on the spot - without clearing it with Bill Clinton (or the President's powerful banker ally, Hugh McColl).

Mr. Cohen, though calling the combination of Mellon Bank Corp. and Dreyfus Corp. "a landmark," made a point of saying, "There are no new principles here."

Big Head of Steam

I'll go him one better. Not only are there no new principles here, there are no principles.

Congress members were conveniently at home explaining their votes on Nafta, campaign reform, and the budget. The Justice Department's antitrust division is completing its 40th year of inactivity on big-bank merger deals.

Mr. McColl of NationsBank is working out a nice deal with Mr. Clinton to benefit a few, gargantuan banks - and, no doubt, the Clinton reelection effort in 1996.

With the Pittsburgh Mellons now getting royal treatment even from a Democratic administration, and with political action committees' influence on elections at an all-time peak, one would have to be an incurable optimist to think this "train from hell" can be derailed. Count this writer among them.

Let me put it even more personally. I have been involved in politics for 40 years, and active in the financial institutions field for 25, and I have never seen a more blatant disregard for the sensitivities of the electorate.

If allowed to go forward, this Clinton-McColl debacle, the "Sam Waltonization" of U.S. banking, will dwarf the costs of the savings and loan bailout or the rescue of commercial banks from their Third-World loan fiasco. The damage would be irreversible.

The investment industry would become nothing more than a department of the nation's large banks, 95% of the industry would be concentrated among a few giants.

Competition would be engaged in by the few remaining large corporations powerful enough to "thumb their noses" al regulators and - take note, Sen. Riegle and Rep. Gonzalez - at Congress. And the big institutions would simply tap the Treasury whenever their mistakes created a crisis that threatened their solvency.

No Help in Sight

The Mellon-Dreyfus combination will probably lead to many more like it. Look for two or three more to be announced before Congress gets down to work in 1994. Then the argument will be. "It's already here. It's too late to stop it."

Congress can. and must, retake the power that has been assumed by regulator after regulator, whose priorities have been to promulgate their special-interest agendas,

But now we have a "wounded lame duck" chairing the Senate Banking Committee, a vendettaintense chairman of the House Banking Committee, and a powerless acting chairman al the Federal Deposit Insurance Corp.

Add to this a congressionally intimidated chairman of the Federal Reserve and a President who seems most concerned about allowing the McColl-connected banks to get bigger faster.

The first victims of the debacle would be the small and medium-sized banks and investment companies that aren't bought by big banks. But Congress, and newspaper editorial writers, should be most concerned about the American taxpayers.

I recall a December 1992 report by Howard Kurtz of the Washington Post, "Asleep at the Switch: How the media bungled the story and contributed to the S&L crisis."

And the words of William Greider in Rolling Stone magazine, who said that despite initial underreporting of the savings and loan crisis, the scandal "was happening in broad daylight in Congress."

Well, it is happening again. Fortunately, there is time, albeit little, to alert the nation before the damage is done. Speak out now, opinion makers, and forget about the easy cop-out of humble apologies and self-flagellation.

Mr. McCrady heads McCrady/Midwest, a business and trade consulting firm. From 1976 to 1988 he was executive vice president of the Independent Bankers of Minnesota.

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