While studies by two federal agencies recently found that bank customers generally know as much about investing as people who bought mutual funds elsewhere, consumer groups continue to find fault with banks' investments sales practices. Speaking on behalf of the Consumer Federation of America, Mary Griffin, insurance counsel for Consumers Union, called on Congress last month to enact laws to protect consumers who buy investment products from banks. The following is excerpted from her testimony before the House Banking subcommittee on capital markets, securities, and government sponsored enterprises:
Over the last few years, numerous studies have indicated that there is a serious problem in the way banks are marketing nondeposit investment products. Consumers are victimized by deceptive bank practices leading them to believe that uninsured mutual funds, annuities, junk bonds, and other investments are insured.