WASHINGTON — When the Gramm-Leach-Bliley Act became law last November, many observers were quick to write the obituary for community banks, predicting that the new law would help financial services conglomerates bleed customers from their smaller brethren by offering broader services at less cost.

High on the list of community bankers’ worries was that large banks would acquire insurance underwriting affiliates and sell bank products to their large policyholder bases. Before the law’s enactment, banking companies could not underwrite insurance and could only operate insurance agencies in towns with populations of 5,000 or less. The new law provides for a financial holding company structure with much wider powers.

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