WASHINGTON Ten House Banking Committee members reiterated a warning to federal regulators Wednesday not to issue final rules on merchant banking without congressional approval.
In a letter to Federal Reserve Board Governor Laurence H. Meyer and Treasury Secretary Lawrence H. Summers, a bipartisan group of lawmakers led by Rep. Richard Baker, R-La., complained that a proposed capital charge and other restrictions would make it more difficult for financial holding companies to engage in merchant banking than the Gramm-Leach-Bliley Acts authors intended.
We believe that several provisions of the interim and proposed rules are contrary to the intent of the legislation and, in fact, represent a hindrance to the financial modernization envisioned by passage of the Act, the lawmakers wrote.
