Financial Services Modernization Act Law and Legal Definition
The Financial Services Modernization Act of 1999 deregulates the financial industry. The Act integrates the operations and investments in business thus enhancing the competition in the financial service industry. The Act is mainly applied to insurance companies, brokerage firms, investment dealers, and other like industries. The Act is also known as the Gramm-Leach-Bililey Act.
The Act provides:
1. for financial Affiliations;
2. for creating new investment holding company structure under the Securities and Exchange Act;
3. for the operation of State Laws;
4. for subsidiaries of National Banks to engage only in financial activities;
5. for including general banks under the definition of brokers and dealers;
6. for re-domestication of mutual insurers to another state;
7. for the creation of a uniform insurance agent and broker licensing system;
8. for ATM fee reforms; and
9. for privacy.
The Act amended the Glass-Steagall Act of 1933 by removing the restrictions imposed by the Act and the Home Owners Loan Act to prohibit new unitary savings and loan holding companies from engaging in non-financial activities.