President Clinton signed the financial reform bill Nov. 12. The House-Senate conference committee approved it Nov. 2. Two days later, the Senate approved it on a 90-to-8 vote; the House vote was 362 to 57.The 416-page law repeals the Glass-Steagall Act of 1933 that separated commercial and investment banking and amends the Bank Holding Company Act of 1956 so holding companies may underwrite insurance. Mergers among banks, securities firms, and insurers will be allowed 120 days after enactment to give regulators time to write implementing rules. The Federal Reserve Board will oversee the resulting diversified financial holding companies but their subsidiaries will be overseen by functional regulators.

The law imposes Community Reinvestment Act requirements on banks that merge with insurance or securities firms, creates consumer privacy protections, and prevents unitary thrift holding companies from being sold to nonfinancial entities.

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