August 31, 1993
TO: BOARD OF GOVERNORS NO. 76-93
RE: REMARKS OF BANKAMERICA CHAIRMAN IN SUPPORT OF EXTENDING CRA
TO NONBANKS
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The Chairman and Chief Executive Officer of BankAmerica Corporation,
Richard M. Rosenberg, recently recommended an extension of the Community
Reinvestment Act to mutual funds and other nonbank financial institutions. In
a recent appearance before the Federal Reserve Bank of Dallas Community
Reinvestment Conference, Rosenberg stated that these institutions "benefit
indirectly" from FDIC deposit insurance, at banks’ expense. Rosenberg argued
that:
What has emerged in the past decade-and-a-half is a
parallel banking system comprised of mutual funds,
finance companies and commercial paper markets -- an
industry that provides traditional banking services but
has no explicit charge to serve lower-income segments of
the community.
Rosenberg concluded that CRA should be viewed as a "big tent" in which "everyone
with commitment, resources, or ideas is welcome." A copy of Rosenberg’s speech
is attached.
Matthew P. Fink
President
Attachment