A controversial piece of legislation expanding the services offered by state-chartered banks has advanced to the Senate floor for debate, possibly this week.

Last week, Utah bankers gave up on trying to sell real estate, hoping to advance their bid to at least dabble in insurance and securities.While no opposition to SB185 has surfaced from the securities industry, insurance agents turned out in force Friday for the legislation's first hearing before the Senate Health Standing Committee.

The bill's sponsor, Sen. Kay Cornaby, R-Salt Lake, and regulators and industry lobbyists said the state's largest and oldest banks and financial institutions already can sell insurance and securities and the proposed law would allow the small percentage that can't to compete.

But members of the Independent Insurance Agents of Utah accused bankers of orchestrating a conspiracy by having the bill go through the unlikely course of a Health standing committee and then not having copies of the 125-page bill available until the day before the hearing.

Insurance salesmen warned lawmakers that the proposed law would allow banks to use their credit powers to coerce customers into buying insurance.

"This bill is not needed by the consumer and the time to defeat it is now," said Ken Osborne, state director of the Independent Insurance Agents of America.

Former state insurance commissioner and local life insurance industry lobbyist Roger Day said surveys show the community needs better credit services not more insurance agents, which currently number 17,500 in Utah.

Banks should examine what they do best, lend money, and not "move into areas of the economy that are already suffering from oversupply," he said.

"This (bill) creates an incentive not to make loans and this is bad for the economy."

But Utah Commissioner of Financial Institutions George Sutton said lending has proven a risky business for banks. He explained that banks must be able to expand their services and find alternative sources of income now or face serious problems in the future.

"This (bill) will let banks make changes to remain sound. If you keep them locked in you will see the dangers again," he said.

While bankers may have won the first battle with insurance agents, they lost to the real estate industry and agreed to delete that provision from the bill.

Gary Herbert, president of the Utah Association of Realtors, said the legislation created inequities rather than do away with them. He said a bank's federal deposit insurance, tax supports and financial resources give it an unfair advantage over small real estate agencies.

But, banking lobbyist Paul Rogers warned Herbert that that Realtors' battle with banks isn't over by being amended out of this year's bill.

He said if Herbert is sincere in his plea for equity he should also go after financial giants Sears, Zions Bank and First Security Bank in Utah, which can sell real estate in Utah.

"Only 23 percent of the federally insured deposits in this state can't engage in these activities," Cornaby said. "The ramifications of this bill are very narrow."