Thank you, Mr. Chairman. This hearing serves as an important oversight function of the Senate in examining the regulatory changes recently proposed by the office of the Comptroller of Currency. The actions and rule revisions of the OCC have an enormous impact on the financial services industry and the progress that Congress makes on Financial Services Modernization Legislation.
It seems that recently the national banks have not been pleading with Congress for financial services modernization as they have in the past. The national banks have seen expanded powers based on the recent rulings of the OCC. While I am certainly pleased that the national banks look favorably toward their chief regulator, it is also important that the states' laws are not preempted.
I have concerns about the recent Rhode Island law put in question by the OCC that restricts the sale and solicitation of insurance in a bank. The states, and only the states, should be the regulators of insurance. Allowing a bank loan officer and certain other bank employees to sell insurance on bank property is one activity I see as potentially very abusive.
It may not be in the best interests of the country's financial services industry to allow the primary regulator of our nation's banks to push financial modernization without the go-ahead of Congressional implementing legislation that expressly permits or prohibits certain activities.
The OCC has taken advantage of a loophole in Glass- Steagall to approve new banking activities. This ruling also puts state chartered banks in states like Wyoming at a disadvantage because the state does not allow certain activities that the OCC will allow national banks.
I look forward to hearing the Comptroller answer my
concerns about how the new rules fit into the larger
picture of financial modernization.
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