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Breaching the walls between banking & commerce

Article Abstract:

The government is studying proposals to ease restrictions that separate depositary institutions from other types of firms, particularly the legal barriers that exist between banks and commercial firms that were erected by the Bank Holding Act of 1956. The law only serves to place domestic banks at a disadvantage in the international banking market as they cannot pursue the opportunities that are open to their foreign counterparts. Arguments against the easing of regulatory barriers include potential conflicts of interest and undue concentrations of economic and political power, as well as the possibility that the federal subsidy that banks receive might be transferred to an affiliated commercial firm. However, as international competition escalates, US banks will continue lagging behind their foreign counterparts if they were to remain under obsolete regulatory restrictions.

Personal credit institutions, Installment Sales Companies, Sales Financing, Commercial finance companies, Consumer finance companies

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Level the playing field

Article Abstract:

The legislative battle between credit unions and community banks over the former's practice of recruiting members from unrelated occupational groups must not be confined to tactical issues. Rather, both camps must realize that membership is not everything when it comes to long-term competitiveness and survival. The ability of credit unions to recruit members from all types of organizations will not enhance their long-term competitiveness if they are not efficient in their delivery of financial services or if they cannot access the capital markets to support expansion opportunities and solve credit problems. That is why credit unions and banks must work on a compromise that would level the playing field by junking the common bond requirement and allowing credit unions to have unrestricted legal access to all customers.

Credit Unions, Consumer Credit Regulation, Commercial law, Consumer credit

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Legislation: on the road to financial modernization

Article Abstract:

The various proposals put forward by the Republican members of Congress to reform the US financial system are reviewed. The Financial Services Competitiveness Act (HR 1062) proposed by Congressman Jim Leach seeks to amend the Glass-Steagal Act and to expand the powers of depository institutions, their subsidiaries and affiliates. The Depository Institution Affiliation Act (S.337) proposed by Sen. Alfonse D'Amato aims to eliminate the barriers between commercial banking and financial and nonfinancial activities. These proposals are compared to the positions of the Shadow Financial Regulatory Committee.

Financial Services, Finance and Insurance, Financial services industry

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