Wendell Ford: “I find the House language on foreign banks to be very troubling. My bankers are certainly strongly opposed to it, and I…”

“I find the House language on foreign banks to be very troubling. My bankers are certainly strongly opposed to it, and I believe most of my colleagues will find the same reaction from their own bankers. As the chairman has stated, nothing in the Senate bill prohibits a foreign bank from establishing a subsidiary as a U.S.-chartered bank, which then has available all of the same rights and privileges of interstate banking and branching this legislation provides to U.S. banks. But to obtain these privileges, they must pay the same price as U.S. banks-- compliance with all relevant laws which apply to chartered institutions. This includes community reinvestment laws, consumer banking laws, and fair lending laws. Under the House bill, however, the special section on foreign branching assures an uneven playing field. Under section 104 of the House bill, foreign banks can establish a Federal branch in another State to the extent it would be permitted if that foreign bank were a national bank. Foreign banks can establish a State branch in another State to the extent it would be permitted if the foreign bank were a State bank. If we are going to treat foreign banks as if they are national or State banks for purposes of interstate branching, we had better treat them as if they were national or State banks for purposes of community reinvestment laws, consumer banking laws, and fair lending laws.”