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Recently a joint study, Financial Services Modernization for Texas, was conducted by the Texas Department of Banking, the Texas Department of Insurance, the Texas Savings and Loan Department and the Texas State Securities Board to examine the impact of the Gramm-Leach Bliley Act (GLBA) which was passed by Congress in November 1999 to become effective November 12, 2000. The GLBA modernizes the nation's financial services industry. For the first time in many years, banks, insurance companies, and brokerage firms will be able to affiliate and diversify. The purpose of the joint study was to identify which Texas laws need to be amended to comply with the requirements of the new federal law.
The new law will allow one-stop shopping for banking, insurance, and securities financial products and services. The Act's supporters say that diversified financial institutions can offer customers more choices and better services with greater efficiency at lower cost.
Most consumers will be affected by the enactment of this law because it removes decades-old legal barriers that have separated banking, insurance and financial service industries. The new federal law will preempt (over-ride) state law. As a result, Texas must pass legislation that will make Texas statutes consistent with the new financial services framework set out in GLBA.
Because there is the increased opportunity for the sharing of consumer information, GLBA requires financial institutions to inform their customers of their information sharing policies and give the customer an opportunity to opt-out of sharing with third party non-affiliates.
Some of the recommendations that were made by the joint study include: 1) adopting more uniform insurance agent licensing requirements; and 2) protecting certain confidential information when it is shared between state agencies. For example, as a part of their regulatory duties, the Department of Banking and the Department of Insurance prepare financial examination reports on entities they regulate. The joint study wanted legal wording to ensure confidentiality of these reports when they are shared between state agencies.
For more information on the Gramm-Leach Bliley Act, access the web address at: http://www.senate.gov/~banking/conf/.
October 8 - 14 is National Fire Prevention Week. This year's theme is "Fire drills: The
Great Escape." The best plan is to "be prepared" - every home should have a fire planning and practice in case of a fire.
State Representative Ron Clark
P.O. Box 2910
Austin, TX 78768-2910
(903) 893-9426 * (512) 463-0474
(512) 475-3767 (fax)
ron.clark@house.state.tx.us
http://www.grayson.edu/district62/RonClark.html
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