[Congressional Record Volume 140, Number 8 (Thursday, February 3, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  INSURANCE SALES ACTIVITIES BY BANKS

  Mr. DODD. Mr. President, as many of my colleagues know, I have been 
for many years concerned about the sale of insurance products by our 
Nation's banks. Over the past 2 years, banks have dramatically expanded 
their insurance sales activities. This has occurred not as a result of 
sound policy choices made by the Congress but, rather, as a result of 
creative legal interpretations by Federal bank regulatory agencies.
  As a result of these interpretations, we have reached, in my view, 
the absurd point where we now have financial regulation by loophole. I 
believe Congress ought to put a halt to the further creation by the 
regulators of what has become a hodgepodge banking system. We ought to 
provide sound, coherent and consistent policy on the sale of insurance 
products by banks. Congress must meet the challenge posed by the D.C. 
Circuit court last July by enacting legislation clarifying 
congressional intent on insurance powers of national banks.
  For several months, Mr. President, I have been working with a number 
of banks, insurance agents groups, and insurance companies to craft a 
reasonable amendment to deal with banks' sales of insurance.
  Unfortunately, it has become apparent to this Senator that while I 
could possibly get such an amendment through the Banking Committee, I 
do not think such an amendment has enough horsepower or interest to 
move beyond the committee.
  More importantly, it is also apparent that we have reached an ideal 
time to pass legislation which is enormously critical to me and to the 
long-term health of our banking system, and that is interstate banking 
legislation.
  Today the House Subcommittee on Financial Institutions Supervision, 
Regulation and Deposit Insurance approved interstate banking and 
branching by unanimous vote of 29 to nothing. As the Senate sponsor of 
interstate legislation and a strong, consistent advocate of branching 
efforts, I am very pleased that this important legislation has moved 
one step further to enactment.
  While I continue to support legislation to rationalize bank sales of 
insurance, I do not want to hold up interstate branching legislation. 
Therefore, Mr. President, I am announcing today I will drop my efforts 
to link legislation affecting the insurance powers of national banks to 
interstate legislation. I do not want to compromise interstate 
legislation by linking these two issues, which I think would defeat or 
severely slow down the full branching legislation.
  Therefore, when we have a markup on the 23d of this month in the 
Banking Committee on interstate banking, I will not be offering that 
insurance amendment, nor will I offer it during floor consideration of 
interstate.
  Full interstate branching is needed to streamline administration, 
improve bank efficiencies, ease regional economic slumps, boost 
consumer conveniences, ameliorate the impact of future credit crunches, 
and enhance the safety and soundness of the banking industry.
  Let us move forward and get an interstate bill ready for the 
President's signature by Memorial Day.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The majority leader.

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