Just When Bank Reform Seemed Almost In The Bag...

It has been a rough summer for the Treasury Dept. and its allies in their uphill fight to overhaul the nation's creaky banking laws. They had planned to spend August resting up for a tough but winnable battle to sweep away Depression-era restrictions on banks. Instead, reform forces watched as financial scandals and new warnings of costly bank failures have sapped Capitol Hill's already feeble interest in giving banks new powers. As Congress prepares to return on Sept. 11, some banking lobbyists are beginning to think that the legislation now taking shape may be worse than the status quo. Says one reform advocate: "Kill it before it multiplies."

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