Letter: Banks need to abide by insurance laws

Tuesday, May 14, 1996 | 11:59 a.m.

The comptroller of the currency, who regulates national banks, has shown himself to be no friend of the consumer. For example, the comptroller says national banks need not be licensed to sell insurance, nor must they obey state laws designed to protect customers. Who then protects insurance buyers if banks are given greater access to the insurance marketplace?

The comptroller maintains that state laws don't apply to national banks. Who will stop the banks from tying the approval of a loan to the purchase of insurance? Keep them from using confidential customer records to cross-sell insurance products? Stop them from raising prices like they have in the case of bank fees?

Saying that a national bank doesn't have to follow state insurance laws is like saying a doctor who works for a national HMO doesn't have to be licensed to practice in his state!

In my view, if banks want to sell insurance, they should abide by the same laws that I must obey. They should be licensed agents and meet the same standards required of my agency.

I hope for the sake of Nevada residents, Congress moves ahead with the legislation now pending that would rein in the authority of the comptroller. Congress also needs to make certain that national banks follow state insurance regulations. No one should go unprotected simply because he or she purchased insurance from a bank that doesn't comply with state law.

Richard Hoover, public relations director, Southern Nevada Association of Life Underwriters