Bankers Fear Tougher Foreign Purchase Rules

Top executives of 17 major U.S. financial institutions expressed concerns about Congress adopting far-reaching proposals to regulate foreign purchases of U.S. assets, including requiring lengthy reviews of such deals, according to a letter made public Wednesday.

The leaders of JPMorgan Chase & Co., Citigroup , MetLife Inc., Goldman Sachs Group Inc. and others wrote Senate Banking Committee Chairman Richard C. Shelby (R-Ala.) ahead of a meeting today in which lawmakers will work on legislation to reform the U.S. review process.

Lawmakers have criticized the Committee on Foreign Investment in the United States, which weighs the national security implications of foreign acquisitions of U.S. assets, as insufficient.

The executives supported additional communication with Congress about such deals but warned against congressional vetoes, lengthy review periods and other proposals that could scare off foreign investment.

“We urge Congress to embrace policies that protect national security without resorting to unwise and unnecessary new restraints on open markets and the free flow of capital in the global economy,” they said in a letter dated Tuesday.

They also warned that legislation chilling foreign investment could lead other countries to retaliate.

“We likewise are very troubled by proposals that would discourage foreign investment by requiring lengthy review periods, or proposals that, while intended to elevate national security scrutiny of foreign investments, might well prompt decision makers to disapprove meritorious investments that do not pose genuine national security threats,” they said.

Calls for reform of the foreign investment committee came after Dubai Ports World canceled plans to acquire operations at six U.S. seaports amid opposition in Congress because the company was owned by the government of Dubai, which is part of the United Arab Emirates.