[Congressional Record Volume 144, Number 136 (Friday, October 2, 1998)]
[Senate]
[Pages S11352-S11353]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     FINANCIAL SERVICES ACT OF 1998

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                       GORTON AMENDMENT NO. 3682

  (Ordered to lie on the table.)
  Mr. GORTON submitted an amendment intended to be proposed by him to 
the bill (H.R. 10) to enhance competition in the financial services 
industry by providing a prudential framework for the affiliation of 
banks, securities firms, and other financial service

[[Page S11353]]

providers, and for other purposes; as follows:

       Section 401(a) of H.R. 10 is amended as follows:
       In new subparagraph (9)(C) of section (c) of the Home 
     Owners' Loan Act (12 U.S.C. Sec. 1467a(c)), by inserting the 
     following language after the word ``date,'' in the last line 
     of the subparagraph: ``or that is a company described in 
     subparagraph (A) that acquires control of a savings and loan 
     holding company described in this subparagraph and complies 
     thereafter with subparagraph (B) with respect to any activity 
     in which such company or the acquired savings and loan 
     holding company was not engaged as of the date of the 
     acquisition,''
                                  ____


                              Explanation

       The proposed amendment prohibits a financial company that 
     acquires a grandfathered unitary thrift holding company from 
     engaging in any new non-financial activities post-
     acquisition. Under the proposed amendment, the financial 
     company could retain and operate any existing non-financial 
     activities of the grandfathered thrift holding company 
     without a forced divestiture. This provision only applies to 
     financial companies that are not regulated under the Bank 
     Holding Company Act.
       The proposed amendment does not alter the provisions that 
     prohibit non-financial activities by a banking holding 
     company or financial holding company under the Bank Holding 
     Company Act. Thus, if a banking holding company or financial 
     holding company acquired a grandfathered unitary thrift 
     holding company with non-financial activities, these non-
     financial activities would have to be divested pursuant to 
     the divestiture provisions of the Bank Holding Company Act.

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