Despite the leeway being promised by the Federal Reserve Board and the Comptroller's Office, many bank lobbyists insist they still want broad legislation to end barriers between financial industries.
Large institutions, including Citibank, NationsBank Corp., Banc One Corp., and First Chicago NBD Corp., badly want latitude the Fed and comptroller are unlikely to deliver. For instance: unfettered securities underwriting and merchant banking authority.
"I don't think there's any less enthusiasm at this point," said John Currie, director of government relations for First Chicago NBD. "There are future issues that need to be addressed."
Still, skeptical securities and insurance industry trade groups have attacked the Office of the Comptroller of the Currency for last week's "outrageous gambit" to let banks launch new businesses directly.
The new rule, they charged, coupled with the Fed's expected decision to increase the underwriting limits of section 20 affiliates, gives banks a big competitive advantage and strips away the industry's incentive to negotiate for comprehensive legislative reform.
"This undermines the already suspect motivation of the banking industry to come to Capitol Hill," said Phil Anderson, director of federal affairs for the American Council of Life Insurance.
Admittedly, bank lobbyists worry that any new legislation would give Congress the opportunity to limit court and regulatory decisions that have expanded the industry's powers.
"Obviously we're at the table, though we are very concerned that any bank legislation might once again be contaminated," said Banc One lobbyist Annie L. Hall. "But we would like further progress on Glass-Steagall repeal."
Still, industry lobbyists admit the regulators have given banks the upper hand in negotiations with other industry players.
After 24 years at Washington law firm Williams & Jensen, Ann Costello last week joined Goldman, Sachs & Co.'s three-person lobbying team.
Ms. Costello said she left Williams & Jensen, whose clients include First Union Corp. and CS First Boston Corp., because she wanted to try an in-house lobbying team. "I thought I had the best job in Washington. I was very happy," she said. "But, it's good to get on the inside."
She replaces C. Peter Rose, who transferred to Goldman's New York office. The investment firm's Washington operation also includes Judah C. Sommer and W. Carter Doswell.
Key congressional posts for the next Congress are slowly being filled.
Last week, Rep. Jim Talent, R-Mo., was named chairman of the Small Business Committee, which oversees several federal lending programs.
Rep. Talent, who replaced retiring Kansan Jan Meyers, is a strident Gingrich-style Republican who in the last Congress fought efforts to toughen workplace safety and union-bargaining rules.
Rep. Mike Oxley, R-Ohio, is expected to be named soon as chairman of the House Commerce Committee's finance subcommittee. The new post would give Rep. Oxley substantial say over efforts to expand banks' securities underwriting power.