AT THE BELL

At long last bank reform?

* After 20 years of trying, House-Senate negotiators and the White House cleared the way for financial deregulation, compromising on community lending requirements. That means that under one roof consumers will be able to set up a checking account, buy securities and life insurance. A bill could be voted on as early as this week. Banks will have to maintain satisfactory low-income-area lending ratings to engage in new securities or insurance businesses. If a bank’s rating drops below satisfactory it won’t be allowed to get into another business.

New York Life and Metropolitan Life Insurance Co. also won approval of a provision that would allow them to move out of New York so they can more easily demutualize.

Financials get boost

* Bank reform capped off a surprisingly good week for financials despite conventional wisdom that interest rate hikes should hurt them.

J.P. Morgan & Co. Inc. stock climbed $18.9375 to $124.6250 Chase Manhattan Corp. rose $14.6875 to $81.1875, Morgan Stanley Dean Witter & Co. jumped $14.75 to $102.8750, Merrill Lynch & Co. Inc. climbed $7 to 72.125, and Citigroup increased $6.0625 to $48.1875. Meanwhile, the yield on the 30-year Treasury crept 0.09 over the week to close at 6.35%.

“We don’t know if the bill will be as favorable as the market seems to think,” says Raphael Soifer, an analyst at Brown Brothers & Co. “We remain cautious-the market tends to have first-blush reactions.”

AmEx makes nice with advisers

* In response to criticism from its planners, American Express Financial Advisors is revising its new franchise agreement so that advisers who leave with clients are not automatically liable for the company’s arbitration expenses. AmEx can sue advisers who leave, but unlike the initial contract proposal, it wouldn’t automatically win triple damages.

Northwestern tries for thrift

* Northwestern Mutual Life Insurance Co. has filed an application with the Office of Thrift Supervision to start a trust company to offer personal trust and wealth management services. The Milwaukee-based insurer also has forged an alliance with Northern Trust Corp. to refer rich customers with complex trust or private banking needs to the Chicago bank. In return, Northern Trust will steer its clients to Northwestern agents, provide administrative and record-keeping services for the new thrift and access to the bank’s portfolio managers.

Bad day at BlackRock

* New York-based BlackRock Funds has been slapped with a class action, just a month after its IPO. The company proposed a merger of six municipal closed-end term bond funds with similar perpetual closed-end funds, which was approved by the funds’ board of directors. Chloe Jane Laprade, a shareholder in the New York Insured Municipal 2008 Term Trust, contends that she will lose between $10,000 and $30,000 should the funds merge.

Etc.: No Bs for American fund

* American Funds, the last major fund company that doesn’t issue shares with back-end loads, failed at a shareholder meeting to reach a quorum to allow Investment Company of America fund to issue B shares…Full-service brokerages that have online services, or that charge asset-based fees, would not have to register as investment advisers under a proposal likely to be issued by the Securities and Exchange Commission in the next few weeks….Orbitex Financial Services Group of New York bought Clark Lanzen Skalla Investment Firm Inc. of Omaha, Neb., which runs $1 billion.