WASHINGTON - Legislation that would require banks to fully explain the risks associated with uninsured products was introduced Tuesday by a key Senate Democrat.

Sen. David Pryor of Arkansas, the ranking Democrat on the Senate Special Committee on Aging, said he was compelled to introduce the legislation after listening to elderly investors who did not know they were purchasing uninsured products through their banks.

"I am convinced that more stringent protections are needed to ensure that financially inexperienced bank customers fully understand what they are buying when they invest in uninsured products," Sen. Pryor said.

However, Edward L. Yingling, executive director for government relations at the American Bankers Association, said there is no need for legislation to increase banks' disclosure.

"The regulators have all the authority they need, and have put forth aggressive requirements with respect to disclosure," Mr. Yingling said.

Mr. Yingling added that lawmakers may not have kept up with the recent increased efforts on the part of banks to be clear to customers about what they are selling.

"There's been a tremendous increase in bank disclosure efforts over the last year, and I don't think that all members of Congress are really aware of that," Mr. Yingling said.

The bill would enact protections that many banks already implement, Sen. Pryor said.

Additionally, the measure would limit the compensation bank employees receive for making referrals to securities salespeople and bar the sharing of personal financial data without customers' explicit consent.

Sen. Pryor said increased disclosures will be especially important if banks are allowed to move further into the securities and insurance businesses, as prescribed by the administration and the various Glass- Steagall Act reform proposals in Congress.

"Without the consumer protections called for in my legislation, dropping the remaining restrictions likely would create even more confusion among customers over what products at a bank are federally insured and what are not," Sen. Pryor said.

Glass-Steagall Act legislation introduced by House Banking Committee Chairman Jim Leach does contain some consumer protections. The Iowa Republican's measure would prohibit investment companies affiliated with banks from suggesting that their securities are federally insured.

The Leach bill also would prevent investment companies and their affiliated insured depositories from having the same or similar name.

Given the current climate on Capitol Hill of lifting burdensome regulations from businesses, legislative sources did not give the Pryor bill much chance of passage.

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