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Banking
ATM Fees * Financial
Privacy *
One of the most important accomplishments of the last Congress
was the passage of legislation modernizing the financial services
industry. Signed into new law on November 12, 1999, the
Financial Services Act was 20 years in the making.
I supported the Financial Services Act because it updates
our depression-era banking laws, which are antiquated and
are being quickly outstripped by an evolving market. In my
remarks for the House floor, I stated:
- The simple fact is, these banking reforms are long overdue.
The anti-affiliation provisions of the Glass-Steagall Act
are sorely outdated and have increasingly impeded the United
States' ability to compete in the new world economy. Encouraging
greater competition will lower prices for financial services
and improve products, benefiting consumers and the economy.
The comprehensive financial reforms contained in the Financial
Services Act promote greater competition by allowing banks expanded
activities such as securities and insurance. It also allows
insurance agents and companies to offer financial services typically
provided by banks, and to affiliate with financial institutions.
While I realize some will benefit from the changes more
than others, fostering competition between financial institutions
ultimately will ensure consumers have greater choices at lower
cost.
I also believe any expansion of banking or insurance powers,
must be functionally regulated. Banks that offer insurance
should be regulated under the state insurance commission.
Insurance companies that offer financial services should be
governed by regulations that apply to banks. And the Securities
and Exchange Commission (SEC) should regulate securities activities.
The Financial Services Act includes all these requirements.
ATM Fees
The Financial Services Act also requires ATM operators to
disclose surcharge fees imposed on non-customers, both on
a sign placed on the machine and as part of the on-screen
display. The bill prohibits the imposition of these fees unless
the required disclosures are posted and the consumer elects
to proceed with the transaction after receiving such notice.
Financial Privacy
During consideration of the Financial Services Act, I supported
an amendment to strengthen the bill's consumer privacy protections.
The amendment, which passed by a vote of 427 to 1, does the
following:
- imposes on all financial institutions an obligation to
respect the privacy and protect the confidentiality of customers'
personal information;
- requires financial institutions to disclose their policies
for collecting and protecting confidential information;
- allows consumers to "opt-out" of information-sharing
policies with unaffiliated third parties;
- prohibits unaffiliated third parties that receive confidential
customer information from sharing this information with
any other unaffiliated party; and
- prohibits financial institutions from disclosing to third
parties any credit card, savings, and transaction account
numbers for marketing purposes.
The version of the Financial Services Act ultimately signed
into law further strengthened the above privacy protections
by stating that state laws that provide greater financial privacy
would not be preempted by the bill. |
