
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, February 8, 1991                   TAG: 9102080126
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: Associated Press
DATELINE:                                 LENGTH: Medium

MANY STATE BANKS WELCOME BUSH REFORM PROPOSALS

Some of Virginia's leading banks have welcomed a package of proposals by the Bush administration to broaden the lines of financial services that banks can offer.

The expansion of bank business to include insurance and securities services would enable such institutions as C&S Sovran Corp. to use their branch networks more efficiently, said Page Cranford, corporate general counsel of the company based in Norfolk and Atlanta.

Garland Hagen, executive vice president of the Richmond-based Crestar Financial Corp., said Crestar would move to underwrite commercial paper, a form of short-term debt that is traded by major corporations, and municipal debt securities if those powers become available to banks.

The banking-reform package was prepared by the Treasury Department after 18 months of study and was unveiled Tuesday as the administration's answer to a rash of bank failures unrivaled since the Depression of the 1930s.

In addition to allowing banks to expand services, the proposals would allow banks to be owned by commercial and industrial companies.

Some state bankers said the package would have only a few takers when it comes to offering expanded services.

Paul Geithner Jr., president of First Virginia Banks Inc. of Fairfax, said allowing banks to underwrite and distribute corporate securities like a stockbroker "would be of limited benefit to most banks."

William Shumadine Jr., president of Central Fidelity Bank of Richmond, said activities such as securities underwriting are volatile, "and we want stability in our growth."

The banking proposals must be approved by Congress, and many members are cautious about another round of reforms so soon after dealing with the thrift crisis.

"Congress is still drawing parallels with the savings-and-loan debacle and think that if we don't get tough with banks, they will be in the same situation," Hagen said.

But Burton Harrison Jr., chairman of the Bank of Tidewater in Virginia Beach, said public policy "should not be concerned with the profits of banks. It should be concerned about the safety and soundness of people's deposits."

by CNB