House Banking Committee Chairman Jim Leach said Wednesday that international conglomerates would "begin gobbling up" U.S. banks if banks and nonfinancial firms are allowed to merge.

"It would be like hanging a 'For Sale' sign in front of every bank in the country," Rep. Leach told the CNBC cable network. "There would be no economies of scale in such mergers. Concentration of economic power is not in the American tradition."

Congress holds hearings today on financial modernization.

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