CONFERENCE REPORT ON S. 900, GRAMM-LEACH-BLILEY ACT -- (Extensions of Remarks - November 08, 1999)

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SPEECH OF HON. JERRY F. COSTELLO

OF ILLINOIS IN THE HOUSE OF REPRESENTATIVES Thursday, November 4, 1999

Mr. COSTELLO. Madam Speaker, I rise today in strong opposition to the Financial Services Modernization Act. This bill was brokered by the Republican leadership, in a partnership with the large financial services lobbyists, to the benefit of enormous corporations at the ultimate expense of the American consumer.

This bill will expedite the creation of mega-bucks malls--the one-stop shopping of the financial world. This will hurt consumers because as financial services providers consolidate, competition will decline and consolidate decision-making and services among fewer service providers. Should one of these enormous institutions suffer a financial decline, we could see calls for a bailout that will recall the savings and loan debacle of the 1980's, with taxpayers footing the bill.

I am also concerned of the effects that the Community Reinvestment Act provision may have on certain banks in my district. By reviewing small banks which provide service in underserved communities only once every 4 or 5 years, there is no guarantee that these banks will maintain their lending standards to these communities. A two-year review enforced this. Underserved communities need to be ensured of financial assistance, and this bill does not provide that guarantee.

Most frightening, however, is the effect the privacy provisions will have. Under this bill, financial institutions have access to and distribute our personal information, including our bank and brokerage account or insurance record information, to all the institution's divisions and affiliates, without the customer's permission. In addition, banks will share our consumer information with third parties unless the consumer explicitly tells the financial institution not to. The walls protecting our financial privacy and other personal information are slowly being eroded.

While the Financial Services Modernization Act may modernize the financial world, it does so at the expense of the consumers. I cannot support this legislation.
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