[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[Extensions of Remarks]
[Page 29681]
[From the U.S. Government Publishing Office, www.gpo.gov]



          CONFERENCE REPORT ON S. 900, GRAMM-LEACH-BLILEY ACT

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                               speech of

                            HON. TOM BLILEY

                              of virginia

                    in the house of representatives

                       Thursday, November 4, 1999

  Mr. BLILEY. Madam Speaker, one of the most important aspects of the 
Gramm-Leach-Bliley Act is that it reaffirms a long-standing principle 
of Federal Banking law--that a national bank may not own any interest 
in or control another company engaged in activities that national banks 
cannot conduct directly unless such ownership or control is expressly 
authorized by Federal law. The operating subsidiary compromise agreed 
to by Federal Reserve and the Treasury and adopted in the Act is built 
on and confirms this principle.
  In this regard, the Act would authorize national banks to own or 
control a subsidiary only if the subsidiary engages solely in bank 
permissible activities, or the Congress has expressly authorized 
national banks to own or control the subsidiary, such as in section 25 
of the Federal Reserve Act. The Act includes a new express 
authorization for national banks to control subsidiaries that engage in 
activities that the Federal Reserve and the Secretary of the Treasury 
agree are financial activities. To own or control such a financial 
subsidiary, a national bank must comply with the conditions established 
by the Act.
  National banks are prohibited from owning or controlling any other 
subsidiaries. The general power of national banks under the National 
Bank Act to engage in the business of banking and activities incidental 
thereto does not authorize national banks to own shares of stock or 
other interests in or control a company that engages in activities that 
the parent bank cannot conduct directly. Recently, the Comptroller of 
the Currency has interpreted section 24 (Seventh) of the National Bank 
Act to permit national banks to own and control subsidiaries engaged in 
activities that national banks cannot conduct directly. These decisions 
and the legal reasoning therein are erroneous and contrary to the law. 
The Act overturns these decisions and renders inoperative those 
portions of Part 5 of the Comptroller's regulations that purport by 
administrative action to authorize national banks to control 
subsidiaries engaged in activities that the national banks cannot 
conduct directly.


                                Privacy

  Section 502(b) of S. 900 contains the opt-out notice required by 
Subtitle A of Title V. It was not the intention of the conferees to 
require that an opt-out notice be disclosed for every third party 
disclosure, provided that the consumer has received a prior clear and 
conspicuous opt-out opportunity covering defined categories of third 
party disclosures. As long as consumers are afforded a clear choice 
about whether non-public personal information can be shared with non-
affiliated third parties, the opt-out need not be provided separately 
for each such disclosure.

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