Magazine article American Banker

Bankers Assess Impacts of Ruling in Barnett Case; Banks' Push for Securities Powers and Regulatory Relief Seen Gaining

Magazine article American Banker

Bankers Assess Impacts of Ruling in Barnett Case; Banks' Push for Securities Powers and Regulatory Relief Seen Gaining

Article excerpt

Banks won more than the right to sell insurance nationwide from the Supreme Court Tuesday - they also apparently gained political muscle that will help in their fight for Glass-Steagall reform and regulatory relief.

"The Supreme Court decision is of tremendous importance because ultimately it may remove the key brick in the wall preventing broad financial modernization," said Edward L. Yingling, chief lobbyist for the American Bankers Association.

By striking down a Florida law that blocked Barnett Banks from selling insurance from towns with fewer than 5,000 residents, the Supreme Court also invalidated similar laws in 20 other states.

With the court on their side, bankers will be even less willing to make a deal on the insurance restrictions that have stalled the House Banking Committee's Glass-Steagall reform bill.

But insurance agents, who have ground major banking bills to a halt by pushing for new restrictions on banks' insurance sales, will step up their efforts in a big way. Agents are expected to try harder than ever to parlay their close ties to House Speaker Newt Gingrich and other Republican leaders and get a vote on the bill.

"The agents' lobbying is going to be much fiercer than it has been," said Kenneth Guenther, executive vice president of the Independent Bankers Association of America. " The wolf is no longer at the door; the wolf is in their house."

The Supreme Court decision has already had an impact on lawmakers. After meeting with House Banking's subcommittee chairmen, Committee Chairman Jim Leach was scheduled Wednesday afternoon to present Republican leaders several options for dealing with banking legislation, including Glass Steagall reform and the thrift insurance-fund bailout.

Rep. Richard Baker pressed Rep. Leach to allow holding companies to own both banks and insurance operations. It was unclear late Wednesday whether Rep. …

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