www.DemocraticFundamentalism.org - reclaiming fundamental democratic constitutional values  

Home    About    Books    Links    Government     Entertainment   HiTech   Medicine    Victims    News    Take Action

Globalization - Organizations - Federal Reserve Board   see Also Countries

Fed's Greenspan: More Bank
Fair-Trade Regulations Unneeded
By Rebecca Christie, Dow Jones Newswires 5/30/2002

WASHINGTON -(Dow Jones)- Federal Reserve   Chairman Alan Greenspan  said he saw no need for extra fair-trade regulations for banks, in a letter Thursday to Democrats on the House Financial Services committee.

Greenspan was responding to a March 25 letter from U.S. Rep. John LaFalce, D- N.Y. , and ranking member of the committee, asking the Fed for regulations spelling out how the Federal Trade Commission Act applies to banks. Banks are exempt from FTC supervision, but bank regulators are allowed to enforce the law as it applies to financial institutions.

"The fact that banks are excluded from the FTC's authority...merely reflects Congress' preference that the banking agencies - not the FTC - are the appropriate enforcing authorities for banks," Greenspan wrote. "Given that the FTC Act's prohibition against unfair or deceptive practices applies to banks as a matter of law, the Board believes that a rulemaking affirming the prohibition's applicability to banks is not required."

LaFalce didn't seem disappointed by Greenspan's response, although his initial letter said, "The benefits of regulation are clear." In a response Thursday, LaFalce said he was pleased with the Fed's pronouncement that banks aren't exempt from fair trade rules, and that regulators are prepared to enforce them.

"The Board's reluctance to issue broad regulations defining unfair and deceptive practices have flourished, especially with regard to credit cards," LaFalce said. "As a result, a variety of unfair and deceptive practices have flourished, especially with regard to credit cards."

Other banking regulators also weighed in on fair trade laws and how they apply to banks. Comptroller of the Currency John Hawke praised both LaFalce and Greenspan for wading into the issue.

"I want to congratulate Congressman LaFalce for his leadership in focusing attention on an important issue involving both consumer protection and bank safety and soundness," Hawke said in a statement. "I also want to commend the Federal Reserve and the Federal Deposit Insurance Corporation for confirming the OCC's long-held view that the banking agencies have authority to use their enforcement powers to assure compliance with the Federal Trade Commission Act's prohibition on unfair and deceptive practices."

The Federal Deposit Insurance Corporation put out an advisory Thursday saying that FTC rules did apply and that it would take enforcement actions where appropriate.

"To avoid misunderstanding about the applicability of the FTC Act, this letter is intended to clarify that the FTC Act's prohibition against unfair and deceptive trade practices does apply to your institution, and to its subsidiaries and third-party contractors," the FDIC wrote in a letter to bank executives.


(c) 2001,2002,2003,2004,2005,2006, 2007 DemocraticFundamentalism.org,      All Rights Reserved

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in an effort to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: www.law.cornell.edu/uscode/17/107.shtml If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. The views expressed herein are the writers' own and not necessarily those of this site or its associates.