Fed Voids Bank-Insurance Law: The Federal Reserve...
From Times Staff and Wire Reports
Fed Voids Bank-Insurance Law: The Federal Reserve Board voided a Delaware law allowing banks to sell insurance nationwide in what banking officials described as a turf battle between the central bank and the Federal Deposit Insurance Corp. The order targeted Family Guardian Life Insurance Co., a company controlled by Citicorp’s wholly-owned Citibank of Delaware, and ordered the operation closed. The reserve board said safeguards placed in the law by the FDIC were so restrictive they, in effect, barred banks from the insurance business, and by federal law a subsidiary or division also cannot engage in that business.
