How influential is the commercial banking industry

Kochinke, Clemens and Krüger, Christiane

Bancassurance company in the USA - new opportunities through the Gramm-Leach-Bliley Act

RIW 2000, 518 (Issue 7)

I. Background The previously strict separation of financial services resulted from the waves of bank insolvency that occurred periodically in the U.S.A. These had shown the nationally oriented Americans to what extent the national economy depends on the credit and banking industry and which, because of its direct effects on all areas of the economy, requires special supervision beyond the individual state.7 Müller (fn. 2), pp. 5 f. Around 1900 a tightening of banking supervision was seriously discussed for the first time. This led to the establishment of the Federal Reserve System (FRS) 8 Federal Reserve Act of December 23, 1913, 12 U.S.C. 226; an institution by banks for banks that is subject to control by the federal government; Oppenheimer / Reitmaier, RIW 1988, 526, 527..1. Glass-Steagall Act Nevertheless, the Federal Reserve Board 9Today Board of Governors of the FRS, consisting of seven members appointed by the U.S. President; 12 U.S.C. 241. The general banking crisis that followed the stock market crash of 192910 Many banks then went bankrupt because of the investment of deposits in securities of doubtful value. don't stop. The economic collapse11 Whether the stock market crash was actually jointly or solely responsible for the bankruptcy cf. Otte, DAJV-NL 4/99, p. 117. led in 1933 to the Glass-Steagall Act12 Less known as the Banking Act of 1933 (Banking Act of 16 June . 1933); 12 U.S.C. 24, 78, 227, 335, 377, 378, which became applicable to National Banks and Member Banks. A National Bank is defined according to whether the federal or state grants a license or charter to a bank. This dual banking system (dual banking system / dual chartering) 13 has existed since 1791; See Müller (fn. 2), p. 20. lets the banks themselves decide whether to submit to supervision by the federal government or by the individual states. If the bank has a license under federal law (Federal Charter) 14Depending on the Approval of the Office of Comptroller of the Currency (OCC - a subdivision of the US Department of the Treasury -, 12 USC 1 ff.)., It is considered a National Bank15 In the banking industry of the USA, the National Banks, 12 USC 21 ff., A leading role. They are subject to the National Bank Act of June 3, 1864, 12 U.S.C. 38, issued at the federal level., Federal Laws 1612 U.S.C. 21 Notes of Decisions No. 4; they are subject to state law, except to the extent that it regulates the licensing of national banks or threatens the viability of a national bank or violates federal law; Link, ZvglRWiss Vol. 88 (1989), 161, 172. Banks licensed under state law (state charter) are state banks and are generally bound by state law.17 They are supervised by state banking departments. Member banks, which as state banks, also become members of the FRS by voluntarily joining, have an intermediate status. Although they are also subordinate to the federal authorities, they are only given equivalent status to the national banks to a limited extent and are primarily subject to the regulations of the respective individual state. The provisions of the Glass-Steagall Act are inapplicable to State Nonmember Banks - that is, neither National Banks nor voluntary members of the FRS - because the federal government has no legislative competence here. 18Link, ZVglRWiss 88 (1989), 161, 167 the Glass-Steagall Act introduced the separation banking system, which resulted in a strict separation of the securities business from the other banking business. This meant that commercial banks were basically only allowed to operate the deposit and commercial lending business, in 1912 U.S.C. 377. while the purchase, distribution and trading (underwrite, distribute and deal) in securities in their own name was solely the responsibility of the investment banks, issuing houses and brokerage houses 2012 U.S.C. 378 (a) .. Commercial banks were therefore not allowed to be affiliated with companies. 21 Companies affiliated with banks are their subsidiaries, sister companies and parent companies, 12. U.S.C. 221a (b); for bank holding companies in 12 U.S.C.A. 1841 (k) defined as follows: "'affiliate' means any company that controls, is controlled by, or is under common control with another company". who were primarily engaged (“engaged principally”) in the securities business. The ban also encompassed the union of directors or other employees at a commercial bank and an investment bank2212 U.S.C. 78. and the association of commercial banks with institutions that issue or trade in securities. 2312 U.S.C. 377. Glass-Steagall also amended the McFadden Act of 19272412 U.S.C. 36. that prohibits interstate banking, 25 national banks and member banks from opening branches in states other than their registered office; Link / Hartung, Die Bank 1991, 132, 133. Here, branches are understood to mean the establishment of a legally independent subsidiary bank as well as a legally dependent branch; Müller (fn. 2), p. 34, fn. 196; Werner, Die Bank 1994, 712, 713. confirmed and specified. The change was made according to the regional or home state principle (Home State) 2612 U.S.C. 36 (g) (3) (B). the National and Member Banks were restricted to the state in which they were headquartered in their business activities and only under the legal conditions that the respective state 2712 U.S.C. 36 (f) (1) (A). After all, Glass-Steagall ran the Federal Deposit Insurance Corporation (FDIC) 28, governed by the Federal Deposit Insurance Act, 12 U.S.C. 1811 ff. As a federal deposit insurance. As the independent representative of the US federal government, it is responsible for the insurance of the deposit business of banks and the resulting control of the banking system. The National and Member Banks, which were subject to strict physical and spatial restrictions under the Glass-Steagall Act, quickly discovered loopholes and founded holding companies with their Help them expand across America. This was done through the participation of their holdings in banks and other companies. This clever evasion of the strict regulations did not lead to any damage, but the danger of the formation of banking chains of a holding company and an increased concentration of banks was recognized by the federal legislature. 29 Oppenheimer / Reitmaier, RIW 1988, 526, 527.2. As a result, in 1956, Congress passed the Bank Holding Company Act 3012 U.S.C. 1841 ff., Authorizing bank holding companies to approve new business acquisitions31A bank holding company is defined as a company that controls a commercial bank or another bank holding company; 12 U.S.C. 1841 (a) (1). under the supervision of the Federal Reserve Board 3212 U.S.C. 222nd posed. 3312 U.S.C.A. 1842. In the next few years, bank holding companies purposefully acquired more and more commercial enterprises outside the financial sector, because the Bank Holding Company Act only became applicable when a second bank was acquired. In 1970 "One-Bank Holding Companies" (holding companies with only one subsidiary bank in their ownership) were included and regulated in the Act. The Bankholding Company Act confirmed the separation of banking and insurance operations. National Banks were allowed under the Banking Act.34 Section 92 of the National Bank Act prohibited FRS member banks from selling insurance in cities with populations of more than 5,000; 12 U.S.C. 24 Note 251. In any case, only conduct pure banking business in the area of ​​commercial banking and "closely related" areas.35 Baas, Die Bank 1997, 606. The Bank Holding Company Act also expressly forbade holdings from acquiring insurance companies or from being active in the insurance business .36Link, Die Bank 1992, 175. The law also stipulated that the activities of non-financial companies ("Non-Banking Activities") of the holdings had to be at least "closely related to the business of banking." 37 "Closely related to banking or managing or controlling banks as to be a proper incident. "12 USC 1843 (c) (8). Bank holding companies were prohibited from acquiring banking subsidiaries in any state other than the state in which they were domiciled, unless interstate banking was expressly made legal by the state in which it was incorporated or acquired allowed. 3812 USC 1842 (d), so-called Douglas Amendment; 12 U.S.C. 1846. Finally, the Bank Holding Company Act banned industrial companies from owning banks.39Baas, Die Bank 1997, 606.3. Consequences of the Glass-Steagall and Bank Holding Acts The restrictions under the Glass-Steagall and the Bank Holding Company Act affected commercial banks the hardest. They were mainly referred to the classic deposit and credit business area.40 Fiduciary investment administrations, as well as the issuance of federal, state and local government bonds, the placement of securities on behalf of customers (private placement of securities) and securities transactions abroad remained permissible; Baums, Relationship between Banks and Companies in American Business Law, 1992, p. 5.a) Definition of a bank Since a bank is only a federal or state licensed institution that accepts demand deposits and provides commercial loans, 4112 U.S.C.A. 1841 (c). arose in order to evade the Bank Holding Company Act, so-called "non-bank banks", which specialized in either accepting deposits or granting consumer or business loans.42 Oppenheimer / Reitmaier, RIW 1988, 526, 528. Like investment banks and securities brokers, they were not bound by the interstate banking ban. The Thrift Institutions Association 43 These financial institutions are different from National Banks in the way they do business. Most of the savings institutions are Savings and Loan Associations, whose business area extends primarily to property and building finance (similar to German building societies), but also to deposit and loan transactions; Müller (footnote 2), p. 30, footnote 168 and p. 51; Baums, ZBB 2/1991, 73. However, as private financial institutions, these American-style savings banks cannot be compared with the municipal savings banks in Germany. with investment banks remained permissible. b) Foreign banks in the USA The foreign banks operating in the USA were initially not bound by the same requirements as the US banks. Until the International Banking Act of 1978 came into force, which largely put them on an equal footing with US banks4412 U.S.C. 3103 (a) (7)., For example, they were allowed to open branches in various states. In addition, they still retained some privileges through the protection of property rights (so-called grandfather rights). In 1978 already existing branches could continue to operate. 4512 U.S.C. 3106 (b). In the securities business, the foreign banks maintained the status quo with regard to the subsidiaries acquired or founded before 1978. It did not deal with the prohibition on linking commercial banks with securities institutions.46Link, Die Bank 1991, 300, 301. c) Structure of the supervisory system Until the adoption of Gramm-Leach-Bliley, the individual states were responsible for supervising the insurance sector. The syndicate and securities business was subject to the federal securities and exchange commission (SEC). The banks in the FRS were overseen by the Board of Governors, the federal government (through the Treasury OCC) and the FDIC, while the remaining state banks were under state oversight. The Board of Governors was also responsible for overseeing the Bank Holding Companies. 4. Interim development in finance For about 20 years, proposals for banking reforms have regularly found their way into Congress. Judgments and the decisions made by the two most important supervisory bodies (Board of Governors and OCC) in fact increasingly overrule the provisions of 1933 and 1956 by ordinance.47 Some important changes and laws are listed below, but they are not final. while the economic development was ahead of the legislature. In 1987 and 1989 the handling of paragraph 2048 was forbidden the member banks of the FRS to hold subsidiaries, whose main task ("engaged principally") in the issue, the distribution, the public sale or the Distribution at wholesale or retail level or within the framework of a paper consortium. (Section 20) of the Glass-Steagall Act by the Board of Governors. Initially, it allowed the member banks of the FRS to issue and trade limited securities. Later, bank holding companies were allowed to issue and trade debt securities or equity securities, with commercial banks setting up subsidiaries through them up to a maximum of 10% of their profits from subscription and trading of shares and bonds (fixed-income securities) (Section 20 subsidiaries) .49Otte, DAJV-NL 4/1999, 117; Baas, Die Bank 1997, 606 f .; ders., Die Bank 2000, 32. The Proxmire Financial Modernization Act of 1989 was only planned, but not passed50 The draft law was introduced by the Senators Proxmire and Garn (Oppenheimer / Reitmaier, RIW 1988, 526, 530) and on March 30th. Passed by the Senate in 1988. It failed in the House of Representatives, see Müller (fn. 2), p. 33 .. This act was intended to create a legal basis for the de facto transition from the separate banking system to the universal banking system.51Link, Die Bank 1989, 245. regional restrictions on their business activities and the crisis in agriculture and the oil business reduced since the late 1970s and early 1980s; Müller (fn. 2), p. 30 f .; Link / Hartung, Die Bank 1991, 132, 137. But even the legislative zigzag course in the valuation of assets is ascribed a considerable debt contribution. at Savings and Loan Associations53The Federal Home Loan Bank Act of 1932 and the Home Owners Loan Act of 1933 serve as the legal basis for their activities under this Act. In 1989, the Federal Savings and Loan Insurance Corporation (FSLIC) made high losses the structure and jurisdiction of the FDIC through the Financial Institutions Reform, Recovery and Enforcement Act5412 USC 1811 ff., 1811 Notes of Decisions Nos. 1-3; see Müller (fn. 2), p. 25. amended. With the takeover of FSLIC, the FDIC now administers the Bank Insurance Fund for commercial banks and the Savings Association Insurance Fund for savings institutions.55 Baums (fn. 40), p. 8. Furthermore, the Savings and Loan Associations have a federal license (Federal Charter ) from 1989 authorized and supervised by the newly created Federal Supervisory Authority for Savings Institutions (OTS - Office of Thrift Supervision) belonging to the Department of the Treasury. 56 Baums (fn. 40), p. 20 Since the Federal Deposit Insurance Corporation Improvement Act came into force from 19915712 USC The Riegle-Neal Interstate Banking and Branching Efficiency Act of 19945812 U.S.C. 1811 ff. Allowed the Commercial Banks to operate branches outside their home country, initially in the form of legally independent subsidiaries (interstate banking) and from July 1, 1997 also with the help of legally dependent branches (interstate branching) Almost due to this home state principle, the conclusion of a bilateral agreement based on Section 53c No. 2 KWG between the banking supervisory authorities of the USA and Germany on the relaxation of the regulatory framework for branches of US credit institutions in Germany does not take place, as the USA - et al Because of this home state principle, which relates to the individual US federal states, - could not meet the reciprocity requirement required by Section 53 c No. 2 KWG; Becker / Dittrich, RIW 1995, 739, footnote 2; in this sense also Werner, Die Bank 1994, 712 f. Since December 1996, the bank holding companies have been legally allowed to generate up to 25% of their profits from the business with securities.60Baas, Die Bank 1997, 606, 607; ders., Die Bank 2000, 32.II. After years of changes in the financial sector, the Gramm-Leach-Bliley Act (GLB) now regulates, in particular, financial service mergers that were previously not possible to this extent. In addition, there are new regulations in related areas such as data protection, which is a stepchild of federal law. GLB consists of seven sections. 1. Financial Affiliation (Financial Services Associations) Title I of the GLB facilitates associations of banks, insurance companies and securities companies. In "cross selling", financial companies are allowed to offer all the services of their fellow companies.Such mergers can take place either through the formation of Financial Holding Companies (FHCs) or with Financial Subsidiaries (financial subsidiaries). Banks are now allowed to issue and trade securities with FHCs. Admission to the FHC requires approval from the Board of Governors. For this purpose, the services offered by the FHC must be of a financial nature or classified as financial activity ("financial in nature or incidental to a financial activity, or complementary", § 103 GLB). Existing companies are also assessed according to this principle. They must sell their holdings held by grandfathering no later than 10 years after acquisition ("sunset of grandfather", § 103 GLB). If bank holdings already conduct limited securities business, for example through Section 20 subsidiaries, they now become financial holdings. National banks, which are subject to the supervision of the Department of the Treasury, are forced to set up a holding company for certain activities. They can do underwriting and other securities transactions through their subsidiaries.61 “Well-capitalized and well-managed”, § 121 GLB; Good capitalization of the National Banks and good management are required; Otte, DAJV-NL 4/99, pp. 117, 118. Other business such as the underwriting of insurance policies, § 302 GLB, and participation and development commitments in the real estate sector, National Banks may only carry out through a holding structure.62 Kübler, WM 2000, 287. Financial Subsidiaries must meet the same requirements as FHCs to be admitted. They must be “well capitalized”, “well managed” and have a “satisfactory CRA rating or better”. However, further conditions are imposed on the financial subsidiaries.63S. Listed in § 121 GLB. Above all, the National Banks must be able to guarantee, in accordance with Section 46 of the General Terms and Conditions, that their Financial Subsidiaries are actually operated separately from the National Bank as the parent bank. The separation requires a »Safety and Soundness Firewall«, which is intended to protect a national bank in the event of the subsidiary's insolvency. The FHC can be set up 120 days after the law comes into force, Section 161 of the General Terms and Conditions. In the meantime, the Board of Governors has drawn up by-laws that contain the requirements to be met by the FHCs. To these provisionally applicable in the Federal Register64 Vol. 65, no. 55, March 21, 2000, p. 15053 ff., Anyone could comment until April 17, 2000. An evaluation is not yet available. The statements may result in changes. Financial Subsidiaries could also not be established before March 11, 2000, Section 161 of the General Terms and Conditions. The OCC changed the implementing regulations after publication 65 Federal Register, Vol. 65, No. 13, January 20, 2000, p. 3157 ff. And corresponding statements.66 Federal Register, Vol. 65, No. 48, March 10, 2000, P. 12905 ff. 2. Functional Regulations Title II of the GLB overrides Glass-Steagall to the extent that it creates new structures for securities trading and underwriting by banks and holdings: - Banks can merge with securities companies; - Non-bank affiliates of holdings can operate in merchant banking - National Banks Financial Subsidiaries are allowed to underwrite securities, and they may also be able to enter merchant banking in five years' time; - National Banks can underwrite municipal revenue bonds, provided they are well- The ban on the simultaneous employment of directors or other employees in a commercial bank and in the securities business has also been lifted. However, the Board of Governors may restrict such personnel unions, if this appears necessary as protection. Banks subject GLB to a registration and reporting supervision for broker-dealer affiliates with the SEC as the stock exchange regulator. So far, the banks were exempt from this requirement under the Securities Exchange Act of 1934, as they were not allowed to develop in the securities business. GLB removes this exemption, and bank affiliates in the securities sector are also monitored by the SEC and the National Association of Securities Dealers for the NASDAQ exchange. However, the law contains "push-out" exemptions, according to which a bank may conduct certain securities transactions itself without having to push them to broker-dealer affiliates monitored by the SEC (to push out), §§ 206, 207 GLB To achieve the goals of the ABG, the SEC and the Board of Governors must coordinate their control functions with the future mixed financial products. For the regulation of securities transactions by banks ("push outs") and activities by investment banking companies, the SEC will develop implementing provisions by May 12, 2001, Sections 209, 225 of the General Terms and Conditions. As with all such regulations, the public is involved through the opportunity to comment, which also applies to foreigners concerned. Insurance Title III of the GLB authorizes banks and holdings to conduct insurance business. Bank holding companies are now allowed to "underwrite, broker and sell insurance and annuities." For this type of investment Becker / Dittrich, RIW 1995, 739 .. Prerequisites for this are the approval of the holding as FHC by the Board of Governors and proof that all financial subsidiaries of the holding are well-capitalized, well-managed and at least a satisfactory CRA In order to underwrite insurance, a national bank needs a holding structure. Only the business areas "broker and sell insurance and annuities" are available to it via a financial subsidiary. 68 A financial subsidiary of a national bank is defined as a company that is controlled by one or more banks or savings institutions and whose business area is "financial in nature or incidental to such activities" is. open except in places with a population below 5000 inhabitants. Here, the National Banks themselves are allowed to offer insurance. GLB does not directly regulate the insurance business of the State Banks69 What is meant here are the State Banks that are members of the FRS. State Non-Member Banks and their Subsidiaries are not tied to ABG. Basically, the regulations in the law of the admission state can be found here. However, some states have "wild card" laws that allow state banks to do the same thing as national banks. Insurance underwriting is governed by federal law, including state banks and their subsidiaries through the Federal Deposit Insurance Corporation Improvement Acts of 1991 in conjunction with GLB. Whether a holding company or bank plans to conduct insurance business in a US state, state approval remains required. GLB stipulates that the individual states may unfairly and discriminatively prevent deposit-taking institutions (Commercial Banks and Thrifts) and their affiliates from also conducting insurance business with them. In the future, uniform approval requirements agreed by the individual states are planned. Unitary Thrifts (savings institutes) Title IV of the GLB closes a loophole in the law, according to which other companies have so far been able to take over savings institutes without restriction. With effect from May 4, 1999, the GLB ends this bypassing option by prohibiting future acquisitions or the establishment of new unitary thrifts by non-financial companies (commercial or industrial companies), § 401 GLB. Unitary Thrift Holding Companies that already exist or have been registered by May 4, 1999 in commercial hands enjoy grandfathering, but may only be resold to finance companies. Privacy (data protection) Title V of the GLB introduces a data protection provision on banking law into the patchwork of U.S. federal data protection law, the main characteristic of which is free access to data of all kinds, with a few exceptions. Title V supplements these exceptions in favor of the consumer with a ban on the disclosure and use of his personal data (Nonpublic Personal Information) by financial institutions to third parties outside a group, § 502 GBL. According to § 504 of the law, the FDIC, the Board of Governors, must OCC, the OTC (collectively referred to as "the Federal Banking Agencies"), the National Credit Union Administration (NCUA), the Secretary of the Treasury, the SEC and the Federal Trade Commission draw up rules to implement the ABG. These data protection regulations are intended to set a framework that financial institutions may, but in no way breach, in order to exclude third parties from personal consumer data. Third parties within the meaning of this provision are all non-affiliated third parties. Consumers can agree or disagree (to “opt out” 70In the US, however, an “opt-out” generally means access to services Declare to pass on your personal data by signing an information or explanatory note. President Clinton advocates more far-reaching restrictions on data protection. Also within the financial service alliances, the forwarding of customer data should depend on their consent in order to avoid misuse of private information. However, no agreement has yet been reached in Congress on this proposal.71 The Washington Post, May 1, 2000, p. A 26; It is feared that, for example, a life insurance company within a conglomerate of a bank will disclose the medical history of a mutual customer and that the customer will not receive a loan from the bank due to the information passed on. The disclosure of personal data without the consent of the person concerned is now punishable. A prison sentence of up to five years is intended to protect the financial data of private customers from fraudulent disclosure. This data protection is to come into force six months after a corresponding ordinance to be implemented has been issued, §§ 510, 504 GLB. Although this should be announced by May 12, 2000, the low importance of data protection in the USA is shown by the fact that the legislature also allows an extension of the deadline. So far, the Federal Banking Agencies have worked together and with the help of the NCUA, FTC, SEC and the Treasury Department (the latter will, however, develop a proposal tailored to this separately) 72 The SEC's draft regulation was published in the Federal Register, Vol. 65, No. 46, March 8, 2000, pp. 12354 ff. a draft regulation for the implementation of Subtitle A of Title V was created. This has already been printed in the Federal Register73 Federal Register, Vol. 65, No. 35, February 22, 2000, pp. 8770, 8771 ff., And the public had until March 31, 2000 to discuss the subject of »Privacy of Consumer Financial Information ”. 74 Federal Register, Vol. 65, No. 41, March 1, 2000, p. 11062. Published 75 Federal Register, Vol. 65, No. 35, February 22, 2000, pp. 8770, 8789 ff. the draft ordinances of the OCC, Board of Governors, FDIC and OTS about the insertions in the corresponding laws, which are required according to § 505 GLB, which describe the tasks of the respective federal authorities. Further provisions a) ATM Fee Reform (ATM fee reform) Title VII of the GLB reforms the regulations on ATM fees. In the future, ATM operators and operators who charge a fee when a non-customer uses their ATMs will have to disclose the amount of the external machine fee. The announcement must first be made by means of a clear notice on the ATM and then either appear as a further message on the screen or alternatively in printed form before the start of a transaction. However, the ATM operators and operators were granted a legal deadline until December 31, 2004 to convert the technology in this regard, § 702 GLB.b) Community Reinvestment Act to the Community Reinvestment Act (CRA) 76 from 1977, 12 U.S.C. 2901 ff., Which regulates local investment and lending obligations of banks, contains additional provisions in Title VII. Despite the restructuring of the financial system, President Clinton wanted to maintain the politically important protection and promotion of low-income areas and ethnic minorities, to whom loans are to be granted and the associated risks, to be maintained. 77 Kübler, WM 2000, 287, 288. Strict guidelines for the implementation of the CRA do not exist, but should take place in an appropriate form according to the individual circumstances of the financial institutions. Therefore, it is not expected that high-risk loans that jeopardize the solvency of a bank will be issued. Rather, the CRA activities should be »safe and sound«. Every year, the lending institutions must submit an annual report on the loans based on the CRA and on the agreements made. This disclosure of contractual conditions serves to inform the public and banking supervisory authorities. In accordance with these reports, the lending institutions are checked for a so-called “satisfactory rating” (CRA rating). If this check is unsatisfactory, the board of governors of a company can refuse to set up an FHC.78 It is enough that only one of the banks or savings institutes has not achieved the "satisfactory rating". or new business activities of an existing bank or FHC may not be approved. For smaller financial institutions79Small banks and savings and loans with no more than $ 250 million in assets. As a relief, the law allows greater intervals between checking their CRA scores.80 These reliefs will benefit more than 82% of all banks, which means that in poorer areas where smaller banks are to be found, fewer funds from the CRA are used To be available; Daily Report for Executives, BNA, Washington, No. 205, 25.10.1999, pp. AA -2. Loan recipients (especially communities) must also be accountable for the use of the money, in order to ensure that money borrowed is in the public interest is issued. The obligation to make regular statements does not apply for up to six months after the entry into force of the GLB, § 711 GLB.III. Outlook and conclusion 1. Studies and ReportsGLB poses a challenge in many areas. Therefore, the law requires a large number of studies and reports that must be submitted to the US Congress on certain key effective dates specified in the law ; For example about: - Areas of activity of FHCs by the Board of Governors and the Secretary of the Treasury, § 103 GLB; - Handling of customer data within the financial institutions and their affiliates as well as the risks and advantages for customers by the Secretary of the Treasury, § 508 GLB; - Development of lending due to the CRA, in particular with regard to non-fulfillment, offenses and profitability by the Board of Governors, § 713 GLB. This is intended to give the US Congress an overview on the one hand of the advantages that the new law brings with it, and win about any deficiencies that can be remedied on the basis of the studies. 2. Initially, the implementation of the GLB will be a daunting task in the insurance industry. So far, the regulations on the authorization to sell insurance products have been subject to the law of the individual states. The new law provides for a regulation at the national level in the future. In some places this is seen as the creation of a new "Federal Bureaucracy." 81 Kopecki, The Wall Street Journal, February 22, 2000, p. A 27 B. Exact ideas and approaches do not yet exist. The lobby of the Insurance companies and the Insurance Commissioners Group. In the event of a national standardization of licensing, she fears that numerous small insurance companies will be taken over by increasingly powerful banks.82 A “national treatment of insurance companies, similar to a national charter that banks have” is being considered. The banks, in turn, criticize the fact that they have GLB permit business with insurance products, but the insurance approval process is extremely cumbersome due to the state regulations.83 If a bank wants to sell insurance products in all 50 states of the USA, it needs a license for each 50 states. The banks consider this requirement to be out of date and demand the immediate change in order not to hinder the beginning globalization through regulations from a time when insurance business could not be carried out across the borders of a US state. Rather, the banks should also be given the prospect of opting for national supervision or supervision by the smallest possible number of federal authorities, depending on their options in the commercial banking sector.84 Kopecki, The Wall Street Journal, February 22, 2000, p. A 27 B.3. Compliance with antitrust regulations The implementation of the GLB also proves to be problematic with regard to its § 133.This refers to the Federal Trade Commission (Federal Agency for Consumer Protection) and the Department of Justice (Ministry of Justice) as antitrust authorities. Banks and savings institutions seeking to acquire a non-financial institution must first obtain approval from the Federal Trade Commission. If a merger takes place without such approval, it is illegal and can be punished with civil penalties (as an administrative offense). If, on the other hand, a non-bank institution acquires a bank or a savings institution, this does not require approval, unless the bank or the savings institution itself has a subsidiary. An approval process for the acquisition can be lengthy if, for example, by the Federal Trade Commission after the application documents have been submitted Further documents and information are requested (so-called “second request”). The Federal Trade Commission has therefore announced that it will make the approval process more effective and call in additional staff to ensure that incoming acquisition applications are processed quickly.4. Overlapping of competencies The assignments of competences at the level of supervision and monitoring partially overlapped in the past and have not changed fundamentally today. It is crucial, however, that the Board of Governors must decide in advance about the approval of the establishment of an FHC or a Financial Subsidiary. If approval has been granted, supervision is functional, so the same bodies remain responsible for control, with the FHCs being supervised by the Board of Governors in accordance with the Bank Holding Companies. Foreign banks: Foreign banks operating in the US have the option of submitting themselves as approved FHC to the new law or to subordinate themselves to the International Banking Act as before. The latter is partially granted grandfathering for some foreign banks. Two years after the entry into force of the GLB, however, the Board of Governors has the right to restrict this grandfathering, insofar as such activities are not permitted without restriction even for an FHC. In the long term, foreign banks are therefore treated like U.S. banks. In the area of ​​non-financial activities, nothing changes for the foreign banks; they can continue to operate them unhindered. The implementation of the ABG for foreign banks is carried out by the Board of Governors. On the one hand, this ensures equal treatment, but initially subjected the foreign banks to a slower approval process. This decision was later revised by the Board of Governors, but it places different demands on US and foreign banks with regard to the ratio of investments to assets. This particularly annoys European banks, which are used to offering their customers a wider range of services than US banks. Europeans consider this unequal treatment to be discriminatory; it also has a negative impact on their competitiveness.85Nicholson, The Wall Street Journal, April 19, 2000, p. A 10.6. It should be noted, regardless of all the problems that have surfaced so far and will arise in the future, that Americans are now also legally allowed to set up universal banks. Your advantage is the specialization that has been compulsory for years in the traditional lines of business due to the individual subsidiaries. In this respect, traditional European universal banks have a head start in some areas.86 For example, the brokerage houses on Wall Street have become the world's leading investment banks; Baas, Die Bank 2000, 32, 33 f. The foreign banks now finally have a place on Wall Street in prospect. 87 Baas, Die Bank 2000, 32, 34.

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