With the repeal of Section 20, banks have more flexibility to engage in securities underwriting and dealer activities.
There is also a "catch-all" de minimis exemption for isolated transactions that fall outside of the items specifically exempted (subsection B(xi)).
It is expected that this will help with incidental transactions.
In the case of a State nonmember bank, this would result in a conflict of interest situation and would, if proper safeguards were not taken, result in a deficiency in the bank's operation and action by the Corporation to remedy the situation.
The GLBA repealed Sections 20 and 32 of the Banking Act of 1933 [Section 101 of GLBA].
There is an exemption for banks engaging in traditional trust and fiduciary activity, provided a few key points are followed.
These include how compensation is received, how the activity is marketed, and how transactions are directed.
To provide for the regulation of securities exchanges and of over-the-counter markets operating in interstate and foreign commerce and through the mails, to prevent inequitable and unfair practices on such exchanges and markets, and for other purposes.
The Banking Act of 1933 (Act), in particular Sections 16, 20, 21, and 32, are often called the Glass-Steagall Act, was enacted to address questionable banking industry practices during the 1920's and 1930's..
This allows interlocks and poses a new conflict of interest situation.