Developments of Note
Financial Modernization Legislation Update
On July 30, 1999, the House appointed 42 lawmakers to a conference committee to resolve differences between the House and Senate versions of the "Financial Services Act of 1999" (H.R.10 and S.900). Both versions of the bill allow commercial banks to affiliate with non-bank financial services providers, but through different structures. H.R.10 allows banks to affiliate either directly through subsidiaries or indirectly through a holding company structure, while S.900 requires the use of the holding company structure for banks with more than $1 billion in assets. Other major issues to be resolved in committee include whether commercial firms should be allowed to buy thrifts, what level of privacy protection is needed for consumers, how much regulatory authority should be given to the Securities and Exchange Commission ("SEC"), and the effect of the bill on the Community Reinvestment Act of 1977. The 42 House
