Senate OKs new banking-securities-insurance law

On November 4, by a vote of 90 to 8, the Senate adopted the Financial Services Overhaul bill, which eliminates the provisions of the 1933 Glass-Steagall Act that impeded mixing banking and securities activities and the 1956 Bank Holding Company Act that impeded mixing banking and insurance activities. The bill, long pushed by Sen. Phil Gramm (R.-Tex.) and Jim Leach (R.-Iowa), was passed by the Senate the next day and then signed by the President.

Among the final points of contention between Gramm and the White House was the 1977 Community Reinvestment Act that forces banks to make loans in low-income areas. These loans often end up going to radical groups as a result of what critics charge are little more than shakedowns. (See Ann Coulter's column in HUMAN EVENTS, November 5, page 6.) Gramm wanted to reduce the scope of the law, but ended up having to settle for somewhat greater public disclosure of the loans and reports on how groups spend the loan proceeds.

Liberal Sen. Paul Wellstone (D.-Minn.), one of the few opponents of the bill, feared that it would "make it easier for banks, securities firms, and insurance companies to merge into gigantic new conglomerates that would dominate the U.S. financial Industry and the U.S. economy."

The provisions that the bill would repeal were put in place during the Depression to try to prevent commercial banks from risky investment activities. If such "gigantic conglomerates" fail in their risk-taking, Wellstone warned, the entire global economy could be jeopardized. Wellstone also pointed out that when FDIC-insured banks undertake risk, it is the taxpayers who are at risk.

Maverick Son. Richard Shelby (R.-Ala.), although he agreed with the sentiment to repeal the Depression-era legislation, opposed the bill because he said it lacked sufficient privacy protections.

A "yes" vote was a vote to repeal the restrictions on affiliations between banking, securities, insurance and other firms. A "no" vote was a vote against the bill.

FOR THE BILL: 90

REPUBLICANS FOR (52): Abraham, Allard, Ashcroft, Bennett, Brownback, Bond, Bunning, Burns, Campbell, Chafee, Cochran, Collins, Coverdell, Craig, Crapo, DeWine, Domenici, Enzi, Frist, Gorton, Gramm (Tex.), Grams (Minn.), Grassley, Gregg, Hegel, Hatch, Helms, Hutchinson (Ark.), Hutchison (Tex.), Inhofe, Jeffords, Kyl, Lott, Lugar, Mack, McConnell, Murkowski, Nickles, Roberts, Roth, Santorum, Sessions, Smith (N.H.), Smith (Ore.), Snowe, Specter, Stevens, Thomas, Thompson, Thurmond, Voinovich and Warner. DEMOCRATS FOR (38): Akaka, Baucus, Bayh, Biden, Bingaman, Breaux, Byrd, Cleland, Conrad, Daschle, Dodd, Durbin, Edwards, Feinstein, Graham (Fla.), Hollings, Inouye, Johnson, Kennedy, Kerrey (Neb.), Kerry (Mass.), Kohl, Landrieu, Lautenberg, Leahy, Levin, Lieberman, Lincoln, Moynihan, Murray, Reed (R.L), Reid (Nev.), Robb, Rockefeller, Sarbanes, Schumer, Torricelli and Wyden.

AGAINST THE BILL: 8

REPUBLICANS AGAINST(1): Shelby.

DEMOCRATS AGAINST(7): Boxer, Bryan, Dorgan, Feingold, Harkin, Mikulski and Wellstone.

NOT VOTING: 2

REPUBLICANS (2): Fitzgerald (voted present) and McCain.

Copyright Human Events Publishing, Inc. Nov 19, 1999
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