One of the nation's top banking lawyers was quietly shown the door last week by industry representatives working on the insurance issues that are plaguing Glass-Steagall legislation.
H. Rodgin Cohen, a partner in New York's Sullivan & Cromwell, last week was told by other bank lobbyists to withdraw from negotiations between the insurance and banking industries on the question of bank insurance powers.
According to a House Banking Committee staffer close to the situation, Mr. Cohen "put out a piece of paper that actually helped the process along, but which contained some aspects the banks didn't like."
"So just when we're getting things moving along, they start playing real hardball and yank one of their lawyers from the table," the staffer added.
A bank lobbyist said that there were concerns that Mr. Cohen would "draft something that could split the bankers."
Mr. Cohen declined to comment on the matter.
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Steve Judge has a wish list to take to House Commerce Committee lawmakers now that the Glass-Steagall bill is in their court.
Mr. Judge, senior vice president of government affairs at the Securities Industry Association, is not quite satisfied that the bill recently approved by the House Banking Committee is fair to the firms he represents.
He said that he will be lobbying commerce committee lawmakers to change a provision in the legislation that would require securities firms to divest nonconforming assets if they wish to own a wholesale bank.
This is a real problem for many firms that own substantial insurance operations but wish to form an "investment bank holding company" under the measure.
"Many securities firms have no option of getting into commercial banking, because of their holdings," Mr. Judge said.
Among other things, the bill would require securities firms that become investment bank holding companies to divest any investments in insurance or other nonfinancial activities within 10 years. Mr. Judge argued that the bill as currently drafted does not strike a 'very equitable balance" between banks and securities firms.
Mr. Judge said he feels Commerce Committee members will be sympathetic to his requests.
"The history of the Commerce Committee has been very supportive of the two-way-street concept," Mr. Judge said.
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The American Land Title Association hopes to use Glass-Steagall legislation to stop the Comptroller of the Currency from authorizing new insurance powers for national banks.
Ann vom Eigen, legislative counsel for the trade group, said that a financial industry modernization bill is a perfect vehicle for an amendment to place bank insurance regulation in the hands of state insurance commissioners. The bill was introduced by House Commerce Committee Chairman Thomas J. Blilely, R-Va.
"We would prefer to see this loophole-closer get moved with a piece of banking legislation," Ms. vom Eigen said.
She added that though most national banks currently do not sell title insurance, they are allowed to do so in towns with populations under 5,000. And the insurance group had to go to court to stop the Comptroller from allowing national banks outside of small towns to sell title insurance.
"We have strong concerns about bank involvement in this area, because of competition and tying," Ms. vom Eigen said.
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John L. von Seggern was appointed director of congressional affairs for the Office of Thrift Supervision last week.
Mr. von Seggern, who has held the position in an acting capacity since September 1992, will serve as the chief link between the OTS and Congress. He will report directly to OTS Acting Director Jonathan Fiechter.
Mr. von Seggern was hired by the thrift regulator in 1990 as a congressional liaison. Before joining OTS, Mr. von Seggern was a captain in the Air Force.
