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Bank Oversight: Few Cases of Tying Have Been Detected

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Report Type Reports and Testimonies
Report Date May 8, 1997
Report No. GGD-97-58
Subject
Summary:

With increasing cross-industry competition in financial services in the United States, market participants have raised concerns about the so-called "tying" provisions found in the Bank Holding Company Act Amendments of 1970. Those provisions prohibit a bank from engaging in tying practices or, in other words, requiring customers to obtain credit, property, or services as a condition of their obtaining credit or other desired products or services. The banking industry argues for the removal of the tying provisions, while some securities firms, insurers, and independent insurance agents have advocated retaining or strengthening them. This report provides information on the (1) evidence of tying abuses by banks and their affiliates and regulatory efforts to ensure compliance, (2) views of representatives of securities and insurance firms and independent insurance agents on tying provisions, and (3) views of representatives of banks and bank regulators on the tying provisions.

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