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Senate Banking Committee Chairman Shelby Displays Independence

Things may be different now that Senator Richard Shelby (R-AL) has taken over as Chairman of the Senate Banking Committee. Shelby has succeeded former Senator...
February 20, 2003

Things may be different now that Senator Richard Shelby (R-AL) has taken over as Chairman of the Senate Banking Committee. Shelby has succeeded former Senator Phil Gramm (R-TX) as head of the powerful panel, where he is poised to put his stamp on legislation. Shelby's views differ significantly from Gramm's, and are sometimes at odds with those of his House counterpart, Financial Services Committee Chairman Michael Oxley (R-OH).

Shelby outlined some of his differences in a wide-ranging interview last week with the Bureau of National Affairs (BNA). Shelby said he is not willing to moderate his views about such controversial issues as financial privacy and the preemption of state law, simply because of his new role as chairman or because his views may run contrary to the financial services lobby.

Privacy

Among Shelby's views is a strong commitment to privacy. He said he believes the Gramm-Leach-Bliley Act (GLBA) did not go far enough in giving consumers control over how financial institutions use their personal data. Shelby said he favors adopting an "opt-in" instead of an "opt-out" standard for obtaining consumers' permission to share their data. And he called the way financial institutions send out privacy notices "a sham."

Shelby said his committee will consider the reauthorization of the Federal Credit Reporting Act later in the year and schedule several hearings on the question, possibly as soon as this summer. He hinted that he is against federal preemption of stricter state privacy standards.

Banks in Real Estate

Shelby is strongly opposed to allowing banks to engage in real estate brokerage activities. "If the banks are going to be into real estate, they might as well get into selling tires and cars and refrigerators and everything else," he told BNA. "I think the banks ought to stay in their core business. In the financial services, I don't see anyway that real estate development--real estate brokerage--is financial." Shelby said he supports legislation by Sen. Wayne Allard (R-CO) in the Senateand Rep. Anne Northup (R-KY) in the House to amend the Bank Holding Company Act of 1956 to explicitly prohibit financial holding companies and financial subsidiaries from engaging, directly or indirectly, in real estate brokerage or real estate management activities.

What It Means to Agents: Chairman Shelby's support of privacy, his opposition to banks in real estate, his respect for state regulation, his reticence to defer to federal preemption in all cases and his willingness to chart an independent course all indicate he is close in philosophy to our views. This bodes well for independent insurance agents.