This brochure highlights the major provisions
of the Gramm-Leach-Bliley Act (the “Act”),
which was signed into law in November 1999. As I am
sure you are aware, the law updated U.S. financial
services laws and removed the remaining walls that
fragmented the financial marketplace. This legislation,
which represents the most significant change in the
U.S. financial services industry in 66 years, repealed
the core provisions of the Glass-Steagall Act and the
Bank Holding Company Act that restricted bank holding
companies from affiliating with securities firms and
insurance companies.
The Act now permits banks, insurance companies, securities
firms, and other financial institutions to affiliate
under common ownership and offer their customers a
complete range of financial services. As you know,
the Act established two new corporate vehicles for
the conduct of financial service activities -- the
financial holding company and the financial subsidiary.
The Act also established the concept of functional
regulation of subsidiaries of financial holding companies,
and established the Federal Reserve as the umbrella
supervisor.
We hope that the brochure will prove helpful in providing
additional background information to respond to the
opportunities and challenges presented by financial
modernization. Also, I invite you to call upon me,
or any of the contacts listed in the Additional Information
section of this publication, if you have any questions.
Sincerely,
Terry S. Schwakopf
Executive Vice President |
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