WASHINGTON — In a strongly worded letter Wednesday, Rep. John LaFalce told the Federal Reserve Board to back off a proposal that would severely limit the merchant banking powers provided in the Gramm-Leach-Bliley Act of 1999.

“There is no provision in the [law] which requires or authorizes new rules providing specific levels of capital for merchant banking activities,” the House Banking Committee’s top Democrat wrote Fed Governor Laurence H. Meyer.

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