NU Online News Service, March 18, 3:14 p.m. — Washington
The Office of the Comptroller of the Currency says three provisions of a Massachusetts law regulating bank insurance activities violate the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 and thus should be preempted.
In a ruling issued today, the OCC says the three provisions are at odds with GLB because they “prevent or significantly interfere” with the ability of banks and bank affiliates to sell, solicit or cross-market insurance.
One provision at issue prohibits non-licensed personnel from referring a prospective customer to a licensed insurance agent or broker unless asked by the customer.
The second preempted provision bars a bank from compensating an employee for making such a referral.
The third provision prohibits banks from telling loan applicants that insurance products are available from the bank until after the loan application is approved.