WASHINGTON - The Independent Bankers Association of America told Congress Tuesday that it flatly opposes repeal of the Glass-Steagall Act.
Richard L. Mount, president of the IBAA, told the House Banking Committee that small banks would not gain anything from being freed up to offer new services and products.
"I don't see any advantage for community banks by repeal of Glass- Steagall," said Mr. Mount, who is also president and chief executive of Saratoga National Bank in Saratoga, Calif. "We don't have the resources, as small banks, to provide these services," he said. "Thus there would be a competitive disadvantage."
Mr. Mount was on a panel of five bank trade group representatives testifying before the House Banking Committee during its third hearing on financial services modernization.
Weller Meyer, president and chief executive of Acacia Federal Savings Bank in Falls Church, Va., criticized a provision in the bill introduced by House Banking Committee Chairman Jim Leach, R-Iowa. The measure would exempt or "grandfather" unitary thrift holding companies - those that own only one thrift - organized as of Jan. 4 from any future limitations on commingling banking and commerce.
"Two-thirds of the industry had not formed unitary holding companies by that date and would lose an important business option and part of their franchise value," said Mr. Meyer, who testified on behalf of America's Community Banks.
However, Rep. Leach said that his bill would just maintain the status quo for unitary thrift holding companies, which can own a thrift as well as engage in commercial enterprises.
"You have designed into current law an advantage over all other market participants that will be maintained," Rep. Leach said.
