February 9, 1999
The Honorable Arthur Levitt, Jr. Dear Chairman Levitt: I am writing to acknowledge receipt of your letter and enclosure of February 4, 1999, setting forth the Securities and Exchange Commission=s (SEC) objectives for financial modernization. The laws governing our financial services institutions and markets need to be revised, but any financial services legislation must be carefully drawn. Enactment of a bad bill is worse than passing no bill at all. To the maximum extent possible, we must create a fair and level playing field for financial services providers to compete domestically and globally; preserve the safety and soundness of our system; and maintain important taxpayer, consumer, and investor protections. Accordingly, I remain committed to my longstanding basic requirements for financial modernization legislation: true separation and functional regulation of financial services activities. In that vein, I agree wholeheartedly with the SEC=s fundamental principles. I will actively oppose legislation that fails to adequately protect investors or that undercuts the SEC=s ability to carry out its mandate to protect investors and to ensure the integrity of the U.S. securities markets. I also will oppose legislation that eviscerates the insurance compromise forged in the House in the last Congress. By a letter dated February 1, 1999, the Comptroller of the Currency (OCC) conceded Athe important role states have in overseeing national banks= insurance activities@ and Athat the day-to-day supervision of the insurance activities of national banks and their subsidiaries rests with state insurance authorities.@ Comptroller Hawke notes that the OCC retains Aan important supervisory interest@ in all activities, including insurance, that could have an impact on their safety and soundness, and defines this supervisory interest as the ability to monitor these activities as appropriate for risk assessment and capital adequacy purposes. While this is precisely the line that should be drawn, I have grave doubts about the competence of the OCC to carry out the responsibilities on its side of that line, given the imprecision of its recent quantitative responses to me. For instance, the OCC noted that Athe insurance underwriting activities of approximately 4 national banks or their subsidiaries are being run in whole or in part by independent contractors or managing general agents.@ Either the answer is four, or it is not. Measured on this scale, I cannot support the version of H.R.10 reported by the Senate Banking Committee last year and introduced in the House this year. I am committed to working with the Chairman of the Commerce Committee and my colleagues to improve that legislation when it is sequentially referred to this Committee after the Banking Committee reports its amendments. I also intend to negotiate in good faith with the Banking Committee to achieve consensus on legislation for Floor consideration. But I will vigorously oppose any bill that does not contain adequate taxpayer, consumer, and investor protections. Thank you for your guidance on how we can modernize financial services regulation in a manner that does not put the public at risk. Sincerely,
JOHN D. DINGELL cc:
| |
|
 |
 |
 |
 |
 |
 |
 |
 |
