United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-05-08 monographic deposited born digital 29 p. GA 1.13:GGD-97-58 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-97-58 P0b002ee1803803b2 f:gg97058 DGPO 2010-08-12 2011-03-28 GAOREPORTS-GGD-97-58 machine generated eng fdlp REPORT GAOREPORTS-GGD-97-58 GGD-97-58 Banking regulation Bank holding companies Antitrust law Credit Lending institutions Insurance companies Brokerage industry Banking law Consumer protection Bank examination Letter Report GGD

Pursuant to a congressional request, GAO provided information on banks' compliance with the tying provisions of the Bank Holding Company Act Amendments of 1970, focusing on: (1) evidence of tying abuses by banks and their affiliates and regulatory efforts to ensure compliance with the provisions; (2) views on the tying provisions expressed by representatives of securities and insurance firms and independent insurance agents; and (3) views on the tying provisions expressed by representatives of banks and the Federal Reserve and the Office of the Comptroller of the Currency (OCC).<p/>GAO noted that: (1) it found limited evidence of tying activity by banks; (2) Federal Reserve and OCC officials GAO interviewed were aware of only one violation identified during routine bank examinations or hold company inspections since 1990; (3) from January 1990 through September 1996, the Federal Reserve and OCC received and investigated 13 tying-related complaints, only 3 of which resulted in actions against the bank or holding company; (4) bank regulators' special investigation of seven large bank holding companies and four large banks in response to a 1992 tying complaint identified only one instance of tying that led to regulatory action; (5) GAO's interviews with state regulators, small business groups, and others identified little evidence of tying violations, although it was suggested that the limited evidence could be based, at least in part, on borrowers' reluctance to report violations for fear of jeopardizing their banking relationships; (6) those representatives of securities and insurance firms and independent insurance agents GAO contacted that expressed concern about tying advocated maintaining or strengthening the tying provisions as a way of offsetting the competitive advantages they believe banks enjoy; (7) some industry representatives and academic experts interviewed said that a more important consideration than the banking industry's share of the credit market is the availability of credit; (8) bank industry representatives viewed the tying provisions as impairing banks' ability to maximize the economic benefits they might otherwise obtain by offering complementary services; (9) some banking representatives also said that banks' evolving role as only one of many providers of credit makes them less able to coerce customers into accepting tied products or services; (10) with regard to banks' access to the discount window and federal deposit insurance, banking representatives pointed out that, with recent legislative changes, it is now easier for the Federal Reserve to lend directly to various financial firms with liquidity needs in a crisis, not just banks; (11) while the Federal Reserve chose not to take an official position on the need for the tying provisions, OCC cited the provisions' importance in making banks aware of their responsibilities to customers as they provide an increasing array of products and services; and (12) some regulatory staff expressed the bel* https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-97-58/html/GAOREPORTS-GGD-97-58.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-97-58/pdf/GAOREPORTS-GGD-97-58.pdf GAO/GGD-97-58 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-97-58 Letter Report GAO/GGD-97-58; Bank Oversight: Few Cases of Tying Have Been Detected; Banking regulation Bank holding companies Antitrust law Credit Lending institutions Insurance companies Brokerage industry Banking law Consumer protection Bank examination Title 12 Section 1972 12 U.S.C. 1972 Public Law 91-607