States' Role in Regulating Financial Services
State regulation plays a vital role in making the U.S. financial markets the strongest and most dynamic in the world. The state-federal relationship differs among financial sectors. States and the federal government share jurisdiction in the area of banking under the unique American dual banking system. States serve as the sole regulators of insurance. The federal government is primarily responsible for regulating the nation's securities markets, although states serve as critical partners investigating fraud, educating the public, and punishing wrongdoers. NCSL supports state legislative interest in banking, insurance and securities issues with accurate, thorough and objective information and analyses, 50-state comparisons, and updates on the latest initiatives and trends.
Banking consists of separate state and federal chartering, supervision and regulation of banks, thrifts and credit unions. The dual banking system enables state governments to apply state laws and regulations that serve the needs of local economies and that respond to the values and concerns of local citizens, thus, encouraging diversity and innovation. NCSL provides timely information regarding state and federal legislation on such issues as financial privacy, subprime and predatory mortgage lending, financial literacy, payday lending and identity theft.
Insurance provides financial security for people and organizations against unforeseen events. State regulation of insurance protects consumers and ensures the safety and soundness of insurance companies. There are many categories of insurance. These include property and casualty (P/C) insurance for individuals (auto and home insurance), P/C commercial lines (general property and liability, workers' compensation, medical malpractice, life insurance and other investment-oriented insurance (annuities, disability income, long-term care insurance) and health insurance. NCSL supports state legislative interest in insurance issues with accurate, thorough and objective information and analysis, 50-state comparisons and updates on the latest initiatives and trends, including the Interstate Insurance Regulation Compact.
NCSL's Communications, Financial Services & Interstate Commerce Committee provides a forum for legislators and legislative staff to discuss and exchange information about state policy in these areas. The legislators who serve on this committee determine the organization's lobbying effort. The Committee meets three times each year. At every meeting, its members share experiences, discuss issues and consider NCSL state-federal policy positions and lobbying efforts related to communications, financial services and interstate commerce.
For more information, in the Denver office, Heather Morton covers state issues regarding banking, insurance and other financial services. James Ward, in the DC office, handles state-federal issues. Heather Morton (Banking and Financial Services Issues), Jo Anne Bourquard (Communications Issues) and James Ward provide support to the NCSL Standing Committee on Communications, Financial Services & Interstate Commerce.