Markey Opposes Nonbank Banks
WASHINGTON - Rep. Edward J. Markey, chairman of a key House Energy and Commerce subcommittee, said Congress should consider phasing out insured nonbank banks - limited-service institutions owned by nonfinancial parents.
In a memo to members of his telecommunications and finance panel, Mr. Markey said the step should be considered as part of a broader effort to maintain the separation between banking and commerce.
Discussions Begin Sept. 17
The subcommittee will take up the Bush administration's bank reform bill on Sept. 17, Mr. Markey said. That measure would permit nonfinancial companies to own banks.
Nonbank banks came into being through a loophole in the Bank Holding Company Act that permitted companies such as Sears, Roebuck & Co. to own a bank that either made commercial loans or accepted deposits, but not both. They were outlawed in 1987, but an exemption was made for existing nonbank banks.