Magazine article American Banker

Sen. Dodd Seeks Compromise on Insurance, Branching

Magazine article American Banker

Sen. Dodd Seeks Compromise on Insurance, Branching

Article excerpt

WASHINGTON - Sen. Christopher J. Dodd, D-Conn., who has battled for years to limit bank insurance powers, said Tuesday he was seeking an inter-industry compromise on legislation addressing insurance and interstate branching.

Sen. Dodd believes a 1991 bill, which much of the banking industry opposed, reflects "the direction" in which he was trying to move. That bill authorized interstate branching, but set a number of restrictions on bank insurance activities.

"I'm trying to put together a compromise here that will achieve the desired results," said Sen. Dodd during a hearing. "In the absence of that, we are engaged in a wonderful dialogue here, but it's not going to go anywhere."

Credit-Crunch Impact

The Connecticut Democrat spoke as the Senate Banking Committee began hearings on interstate and insurance. The panel's chairman, Sen. Donald W. Riegle Jr. has said he plans to ask the committee to vote on a bill next month.

Several lawmakers said their views on interstate branching had been affected by the credit crunch.

Sen. Connie Mack, R-Fla., and Sen. Richard Bryan, D-Nev., both said that the lion's share of deposits in their state are controlled by a handful of banks, a situation they said exacerbated the credit crunch.

Rethinking Strategies

"With four banks controlling 75% of the deposits, it means that four people can wake up in the morning and decide not to make certain kinds of loans," said Sen. …

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