More Bank For Your Buck? - how the Gramm-Leach-Bliley Act will affects personal finance management - Industry Overview

Black Enterprise, May, 2000 by Jeffrey Mckinney

* Banks will receive less scrutiny from community organizations. Prior to the new law, the CRA allowed for public input or comment--whether it be from a local business owner, minister, mayor or community leader--about a lending institution's performance. Under the Gramm-Leach-Bliley Act, there's a "sunshine provision," which exposes business owners and community groups to being examined by regulators. They face fines up to $1 million if they cannot show specifically how funds they borrowed or were granted were used. "This could discourage people from commenting on a bank's performance," Taylor says, because their comments could expose them to government scrutiny.

* No reinvestment requirements for insurance companies or brokerage firms. The act allows insurance companies and brokerage firms to expand into banking services without making any financial commitment or obligation to minority communities for investment purposes. Mel Gravely, co-founder of an Akron, Ohio-based engineering firm, is concerned about the shaky track record that insurers and banks already have with black consumers. "Will they get better because of their affiliation with the other [institutions]?" he asks. "I doubt it."