NU Online News Service, April 12, 1:53 p.m. – U.S. House Financial Services Committee Chairman Michael Oxley, R-Findlay, Ohio, blasted the Office of the Comptroller of the Currency earlier this week at an insurance industry gathering.
Oxley attacked the OCC for recent rulings that preempted state bank insurance sales laws in Massachusetts and West Virginia.
The Gramm-Leach-Bliley Financial Services Modernization Act gives states the ability to regulate bank insurance sales, but the OCC contends that the Massachusetts and West Virginia laws went beyond the limits set by Gramm-Leach-Bliley.
Congress had no intention of letting the OCC preempt state insurance laws when it passed Gramm-Leach-Bliley, Oxley told 800 brokers and agents in Washington for an Independent Insurance Agents of America legislative conference, according to a summary of his remarks provided by IIAA.
“If we have to have an oversight meeting, we will do so,” Oxley said.
Oxley also called on the Senate to pass federal terrorism insurance backstop legislation and relax rules aimed at using insurance agents to fight money laundering.
Congressional failure to pass the backstop insurance bill is a drag on the economy, Oxley said.
A law Congress did pass in response to the Sept. 11, 2001, attacks, the USA Patriot Act, requires agents and brokers to screen insurance applicants against lists of terrorists and drug dealers, to help prevent such criminals from using insurance products to launder money.
Congress should find a way to ease the burden on insurance agencies, because the risk that insurance agencies will participate in money laundering is low, Oxley argued.