PRESS RELEASE March 11, 1998	Contact: Mary Griffin, grifma@consumer.org Kathleen McShea, mcshka@consumer.org (202) 462-6262 Consumers Union Washington D.C. Office

Latest Financial Services Modernization Bill Troubles Consumers Union

WASHINGTON -- In an urgent letter issued to the House of Representatives Wednesday, Consumers Union asked lawmakers to oppose a new version of the financial modernization bill unless substantial changes are made to meet consumers' needs.

As local banks become full service financial powerhouses which peddle insurance and investment products on top of more traditional services like savings, checking and mortgages, the situation is ripe for abuse, according to Consumers Union, publisher of Consumer Reports magazine. Mary Griffin, an advocate at CU's Washington, D.C. office who has been monitoring the progress of this new banking bill during its machinations through the House of Representatives, and had hoped for a more consumer-friendly outcome.

"It appears that Congress is prepared to expose consumers to unfair risks and high pressure sales tactics for no good reason, " said Griffin who anticipates a vote on the House floor sometime before the spring break . "This legislation spells trouble for the consumer.

"At a time when Congress should be fortifying the law with new protections for consumers, lawmakers appear to be doing the bidding of industry special interests," Griffin added. "While the bill claims to help consumers, it also creates a clear path for circumventing the very safeguards it creates, making them meaningless."

In a letter to House members, Griffin outlined a long list of complaints and urged the legislation be rejected unless changes are forthcoming:

· Consumers could be left in the dark about whether insurance including investment-oriented products such as annuities purchased at banks are FDIC insured or subject to risk of loss when the market goes down. As written, the bill gives a green light to states to permit banks to sell insurance and investments with no disclosures about risks and engage in other misleading or deceptive practices;

· States like Iowa and Connecticut that prohibit ATM surcharge fees, could see these consumer protections swept away by provisions in this legislation that could allow federal regulators to trump state law under broad new preemption standards;

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