First Hawaiian Bank CEO Walter Dods and his wife, Diane, greet guests at the American Bankers Association reception yesterday.
Photo By Kathryn Bender, Star-Bulletin

That's a major theme of the American Bankers Association's annual convention being held through today at the Hilton Hawaiian Village.

"People say to me, 'What's banking going to look like?' ... and I say, 'It's going to look like the grocery business,'" said William Seidman, former chairman of the Federal Deposit Insurance Corp.

Seidman, now a TV commentator, said he believes that the nation's banking industry has been stymied by regulatory constraints - some dating back to the Depression era - that are costing the industry between $10 billion and $20 billion a year.

Once those barriers are relaxed, banks can compete on an equal footing with the investment banks and brokerage houses - and win, he said yesterday in a speech to the bankers.

"I would think that over the (next) few years, you're going to see the banking industry acquire a lot of the investment banks and it will be hard to tell the difference between the two," said Seidman.

Those sentiments were in part echoed by the current heads of the agencies that regulate the banks.

Current FDIC Chairman Ricki Helfer said that prudently expanding the types of products and services offered by banks could strengthen the banking industry through diversification.

And Federal Reserve Chairman Alan Greenspan on Saturday told the convention that proposals by his agency to allow banks to do more securities underwriting and to streamline the bank holding company application process are pushing the envelope under current legislative authority.

First Hawaiian Inc. Chief Executive Officer Walter Dods, who became president of the 8,000-member ABA on Sunday, told the convention, "We want banking to be safe and sound. But some of today's red tape makes no sense, it adds no safety and it protects no consumers."

As ABA president, Dods said he plans to push for the right to sell insurance - something that's strongly opposed by the nation's insurers.

Dods also said he also hopes to work to improve the image of banks which has taken a beating recently. "(Banks) don't get much respect. As a banker, I'm tired of that," Dods said. "A business with more popular support - or at least less animosity - wouldn't be an easy target for cheap shots."

The convention, which began Saturday, has been attended by some 1,000 bankers.