Academic journal article ABA Banking Journal

Fight for Insurance Powers Keeps Passing Milestones

Academic journal article ABA Banking Journal

Fight for Insurance Powers Keeps Passing Milestones

Article excerpt

When Virginia Gov. L. Douglas Wilder signed legislation recently to allow his state's banks to sell insurance products beyond plain-vanilia credit insurance, his state became the 33rd to add some new insurance authority for banks. In the process, the banking industry took one more step toward its goal of winning broad insurance powers for all banks. Virginia story. Virginia's bankers battled for several years and through three successive legislative sessions before their patience paid off.

The bill ran into strong opposition from the state's independent insurance agents, but the bankers' efforts finally won the issue.

The bill's original sponsor, House of Delegates member Bernie Cohen, is a strong consumerist. His sponsorship illustrates the increasing consumer support that is characterizing state banking victories. Consumers realize that when banks enter the insurance business, consumer choices grow and prices become more competitive.

National import. Consumer advantages are just one evident benefit. A General Accounting Office study released in the fall of 1990 said that in addition to such advantages, bank insurance would pose no safety and soundness concerns. Any bank profits resulting from the sale of insurance, said the GAO, could strengthen the industry.

The progress in Virginia and other states reinforces ABA's strategy to support the efforts of state banker associations while pushing for broad insurance authority at the national level. …

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