Newspaper article THE JOURNAL RECORD

Commercial Ownership Spurs Latest Debate

Newspaper article THE JOURNAL RECORD

Commercial Ownership Spurs Latest Debate

Article excerpt

WASHINGTON -- The latest dispute to hold up the bank modernization bill now before the U.S. Senate is about whether companies like Ford Motor and Archer Daniels Midland will still be able to buy savings and loans.

Senator Phil Gramm, Republican of Texas, and other Republicans on the Senate Banking Committee, object to provisions in the bill that would restrict "unitary thrifts," a type of S&L holding company, from affiliating with commercial firms.

Fear that Congress might somehow restrict commercial ownership of unitary thrift holding companies spurred several companies to file applications to become S&L owners before a new law could be passed.

These companies want unitary thrifts because they offer the promise of one-stop shopping for insurance, stocks and banking services held out by the bank reform bill.

"The thrift charter gives them the ability to do virtually anything a bank can do and not be regulated by the Fed," said John Hawke Jr., Treasury undersecretary for domestic finance in a recent interview.

Among the companies filing application were insurers Hartford Life, American International Group, Transamerica Corp., Metropolitan Life and State Farm.

Casket maker Hillenbrand Industries, agriculture giant Archer- Daniels-Midland and Richmond, Va.-supermarket chain Ukrop's Supermarkets also got into the act, winning Office of Thrift Supervision approval to affiliate with unitary thrift holding companies, said agency spokesman William Fulwider.

The dispute is one of several obstacles the Senate Banking Committee must resolve quickly in order to win passage of the bill before Congress leaves in early October. The bill would dismantle Depression-era laws, such as the Glass Steagall Act, that prevent insurance and securities firms from owning banks.

Last week, a dispute over minority lending and banking services for low-income individuals forced delay of a scheduled vote on the bank bill. Senators hope to resolve the dispute and meet next week.

That would still leave the proposed amendment to limit commercial ownership of unitary thrifts. The amendment is backed by Senate Banking Chairman Alfonse M. …

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