There's No Turning Back the Calendar

January is a good month to look forward at the prospects for banking for the coming year. This year marks the final session of the 105th Congress, an election year for everyone in the House of Representatives and one-third of those in the Senate, and an opportunity to give more thought to banking in the next century. Our industry, right now faces some of the toughest challenges in Congress that I can remember. What happens over the next 10-12 months in Washington could alter the financial marketplace for decades to come. I'm speaking, of course, of legislation to let banks engage in new financial services, such as insurance and securities, as well as of the future shape of the playing field for banks and credit unions. After a record number of bankruptcies last year, bankruptcy reform will also be a huge issue in 1998. It's really up to us whether the next 12 months will result in things happening for banking or to banking. The credit union issue will almost certainly heat up in 1998, no matter what the Supreme Court rules on the ABA common-bond case. Our goal, regardless of what the Court says, is to seek greater competitive equality with these tax-subsidized competitors. It's what we as members want. We also want to win a financial modernization package that actually improves our ability to offer customers a wide range of financial services. Too much of what we saw in the first session of the 105th Congress would have moved us backward rather than propel us forward. I continue to believe that Congress can fashion a legislative package that bankers can support. Yes, the insurance companies and securities interests must also see something in it for them. Cross-industry consensus is the only way, ultimately, to get a financial modernization package out of Congress in our lifetimes. I hope that a consensus can be reached. It will certainly be difficult; it may be impossible. But it's very important, and it's why the ABA has remained a part of this debate for so long, when others have cashed in. We want modernization to succeed -- but on terms that are agreeable to banks of all sizes. I've talked to a lot of bankers about financial modernization. Some have asked me, after seeing the gridlock in Congress, Can't we leave things as they are? Unfortunately, a status-quo strategy could actually turn the calendar back for banking. With no change in Washington, we'll still be left with an industry charter that, in many ways, isn't as good as that of the thrifts. …