[Congressional Record Volume 143, Number 67 (Tuesday, May 20, 1997)]
[Extensions of Remarks]
[Pages E982-E983]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE RIEGLE-NEAL CLARIFICATION ACT OF 1997

                                 ______
                                 

                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                         Tuesday, May 20, 1997

  Mr. DINGELL. Mr. Speaker, I rise today to bring to the attention of 
the Congress and the Nation the concerns of the National Conference of 
State Legislatures with regard to H.R. 1306, the Riegle-Neal 
Clarification Act of 1997, which the House will consider today under 
suspension of the rules. H.R. 1306 was introduced on April 10, 1997, 
and referred to the Banking Committee where it was approved by voice 
vote in subcommittee with no full committee markup. As the NCSL letter 
notes, this legislation would negatively affect the ability of State 
legislatures to regulate the sale of the insurance products when those 
sales are conducted through banks. As most Members are aware, the 
Comptroller of the Currency presently is considering whether to preempt 
a statute enacted by the State of Rhode Island. I am inserting in the 
Record copies of the NCSL letter and the comment letter I signed with 
11 other House colleagues critical of the OCC proposal. We have been 
afforded insufficient time and process to consider the negative 
implications of H.R. 1306 on consumer protection and fair competition. 
I remain concerned about these issues and trust that our Senate 
colleagues will address these matters with more deliberation than has 
the House.

                                            National Conference of


                                            State Legislatures

                                                     May 16, 1997.
     Hon. John D. Dingell,
     House of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Representative Dingell: We write to you today to 
     reiterate the concerns of the National Conference of State 
     Legislatures with regard to H.R. 1306, the ``Riegle-Neal 
     Clarification Act of 1997,'' which will be considered on 
     Suspension Calendar during the week of May 19th. You may have 
     heard from certain sources that NCSL had withdrawn its 
     opposition to H.R. 1306. We want to make clear that this is 
     simply not true.
       The National Conference of State Legislatures has long been 
     a proponent of our nation's dual banking system and the 
     benefits of that system to our nation's financial well being. 
     In recognition of the advantages of the dual banking system 
     to the public and to the health of the financial services 
     industry, NCSL historically has opposed any efforts by the 
     federal government to restrict state authority to charter, 
     supervise or regulate the powers of state-chartered banks and 
     thrifts. For this reason we must oppose H.R. 1306. The 
     legislation would alter the intent of Congress as embodied in 
     the Reigle-Neal Interstate Banking and Branching Efficiency 
     Act of 1994, which set specific parameters for the branching 
     of state chartered banks across state lines. For the 45 state 
     legislatures which voted to ``opt-in'' to interstate bank 
     branching, this would significantly change the ground rules 
     which they accepted in allowing their states to host branches 
     of banks from another state.
       Let us provide one example of the impact of H.R. 1306 on 
     the authority of state legislatures. The Rhode Island General 
     Assembly has passed legislation which sets the requirements 
     that all banks must follow in the sale of insurance products. 
     At present the Office of the Comptroller of the Currency 
     (OCC) is considering preempting this legislation's 
     applicability to national banks. Should this happen, under 
     H.R. 1306, the Rhode Island statute would not apply to 
     branches of state-chartered banks from other states doing 
     business in the State of Rhode Island. The Rhode Island law 
     would only apply to those state banks chartered in Rhode 
     Island. This would cause an unfair competitive disadvantage 
     for Rhode Island state banks and thus limit the ability of 
     state legislative authority. It does not take any stretch of 
     the imagination to understand that should H.R. 1306 be 
     enacted in its present form the OCC will soon be the sole 
     arbiter of banking law and regulation.
       As state legislators we are as concerned about the 
     financial viability of our state banking systems, as are 
     state banking supervisors and governors. We are well aware of 
     the enormous contributions that state banks have made to the 
     economic vitality of our states and we seek to continue 
     working with our states' governors to ensure the viability of 
     the dual banking system. However, we must also be concerned 
     that state chartered banks which have no desire to branch 
     across state lines are not placed at a competitive 
     disadvantage. Of the over 7,000 state chartered banks, less 
     than 30% have assets over $100 million and therefore are not 
     likely candidates to branch across state lines. Most state 
     banks are small community banks which have well served our 
     nation's cities and rural areas and have been the economic 
     backbone of our country for over one hundred years. They are 
     the banks which have responded time and time again to our 
     communities economic needs. They have no desire to become a 
     multinational financial giant, branching from coast to coast. 
     As elected state officials we have an obligation to these 
     smaller community states banks and their customers that 
     efforts such as H.R. 1306, geared to the top 30% of state 
     banks, do not place unfair burdens on the vast majority of 
     our state banking industry.
       During the mark-up by the Subcommittee on Financial 
     Institutions and Consumer Credit, NCSL offered reasonable 
     amendments to the legislation which would have provided 
     sufficient accountability to host state legislatures and most 
     importantly its citizens. Unfortunately, the Subcommittee did 
     not accept our changes. Therefore, we must once again declare 
     our opposition to H.R. 1306. We respectfully request that you 
     abide by the commitment made by a previous Congress and we 
     would ask that until some accountability is restored to the 
     host state, you vote no on H.R. 1306.
       Thank you for this opportunity to make clear NCSL's 
     position on this important legislation.
           Sincerely.
     Bill Schroeder,
       Senate Majority Chairman--Colorado, Vice Chair, NCSL 
     Commerce & Communications Committee.
     Myra Jones
       Chair, House City, County & Local Affairs--Arkansas, Vice 
     Chair, NCSL Commerce & Communications Committee.

[[Page E983]]



     
                                  ____
                                         House of Representatives,


                                        Committee on Commerce,

                                 Washington, DC, February 6, 1997.
     Re Docket No. 97-01, 62 FR 1950 (January 14, 1997) Preemption 
         Determination.

     Hon. Eugene A. Ludwig,
     Comptroller of the Currency,
     Washington, DC.
       Dear Comptroller Ludwig: We are writing in response to the 
     above-referenced request for written comments on whether the 
     ``Financial Institution Insurance Sales Act,'' recently 
     enacted by the State of Rhode Island, should be preempted by 
     Section 92 of the National Bank Act.
       The Act does not prevent banks from selling insurance. The 
     Rhode Island State legislature passed this Act to remove 
     Rhode Island's statutory ban on the sale of insurance by 
     state-chartered banks. The legislation also is a valid 
     exercise of that State's right to regulate the business of 
     insurance by protecting consumers from unfair trade practices 
     and providing a level playing field for all sellers of 
     insurance products. For example, section 6 of the bill 
     prohibits the illegal tying of the sale of an insurance 
     product to the extension of credit and section 7 of the bill 
     requires disclosure to consumers that an insurance product is 
     not a deposit and is not federally insured. This legislation 
     is the result of extensive negotiations with representatives 
     of Rhode Island's federally-chartered and state-chartered 
     banks.
       The public has a substantial interest in the continued 
     functional regulation of insurance by the States, regardless 
     of who is conducting the activities. We support the 
     principles of State's rights, functional regulation, and fair 
     and reasonable consumer protection. We support the Rhode 
     Island law and believe that it meets the standard established 
     by the decision in Barnett Bank v. Nelson 116 S.Ct. 1103 
     (1996).
       The Act authorizes the Department of Business Regulation's 
     commissioner of banking to promulgate regulations to 
     implement the sale of insurance under the Act and ``to ensure 
     the safety and soundness of the banking and insurance 
     business.'' Your notice and request for comment makes no 
     mention of the implementing regulations drafted by the Rhode 
     Island Department of Business Regulation and that are pending 
     a February 10, 1997 hearing before that Department and 
     possible further revisions before finalization. As 
     legislators we are outraged at your efforts to usurp the 
     authority and subvert the processes of an elected State 
     legislature that is engaged in valid lawmaking.
       We strongly urge you not to act to preempt the Rhode Island 
     Financial Institution Insurance Sales Act.
           Sincerely,
         John D. Dingell, Tim Holden, Earl Pomeroy, Bobby Rush, 
           Collin C. Peterson, David Minge, Edward J. Markey, John 
           S. Tanner, Gary Condit, Ron Klink, Anna G. Eshoo, Gene 
           Green.

           

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