NU Online News Service, October 28–Four West Virginia statutes regulating bank insurance activities are preempted by the Gramm-Leach-Bliley Act, three banking associations say.
In a brief filed with the Fourth Circuit Court of Appeals, the three groups say that the court should let stand a determination by the Office of the Comptroller of the Currency that the West Virginia statutes “prevent or significantly interfere” with federally-granted bank insurance powers.
The brief was filed by the American Bankers Association, the American Bankers Insurance Association and the West Virginia Bankers Association.
The controversy relates to the following provisions of West Virginia law:
1. A requirement that financial institutions use separate employees for insurance sales.
2. A timing restriction that bars banks from soliciting loan customers for insurance until after the loan has been approved.
3. A restriction that bars bank affiliates from sharing information acquired in the course of a loan transaction or insurance solicitation.
4. A requirement that insurance activities be physically separate from deposit-taking and loan activities.
The OCC determined that the four requirements violate GLB and said they should be preempted.