These guarantees would help focus the attention of this financial giant on local needs. States have traditionally had authority over businesses that operate within their borders. The FRB should make compliance with state consumer law a condition of the merger. These entities should comply with federal law, including the Fair Housing Law. One-stop shopping should not be used as a means to escape consumer protections.
Banks are currently exempt from securities laws that provide a panoply of investor protections.
In addition, any insurance activity must be subject to state insurance laws. Unfortunately, as a result of industry pressure in the early 1980s, Congress enacted legislation that prohibits the FTC from investigating the business of insurance unless a majority of the members of the House or Senate Commerce Committees agree to permit the FTC to conduct a study. We would hope that, although Congress has yet to repeal that outdated law, the companies would be required to come under FTC jurisdiction as a condition of the merger. FTC should also have authority to investigate and take action against any bank affiliates. In addition, the Department of Justice is investigating certain exclusionary practices that involve the credit card industry.