Dingell issued the following statement:

"When the House considers H.R. 10 next week, we will be asked to vote on amendments to permit extensive and imprudent mixing of banking and commerce, and to allow greatly expanded activities by bank operating subsidiaries, like the one that figured in this week's enforcement action against NationsBank and NationsSecurities. The House should just vote NO.

"The Federal Reserve strongly opposes and the SEC also opposes the use of the operating subsidiary structure pressed by the Administration. The Treasury Department's arguments about H.R. 10's threat to the national bank charter go up in smoke. The Fed's careful, detailed, and thought-provoking analysis of the op sub's dangers to the banking system, to the federal safety net, to the competitiveness of independent financial services providers, and ultimately to John Q. Public, should be required reading.

"On the banking and commerce issue, the April 28 amendment pro- posed by Congressmen LaFalce and Vento would allow up to 15 percent of a financial holding company's revenues to be derived from nonfinancial businesses and would remove the $500 million revenue cap presently in H.R. 10. With the amendment, a large financial conglomerate could literally own hundreds of nonfinancial entities-- in fact, all but the largest 3 nonfinancial companies could be acquired --without hitting this percentage restriction. The Fed warns us about the problems now facing some Asian banking systems where these relationships have undermined the soundness of these systems and put intolerable burdens on the taxpayer.

"These lessons are directly applicable. We ignore them at the taxpayer's peril."

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