Banks Get Gramm-Leach-Bliley Reprieve

By Christopher WeemsAssociate Editor

Banking institutions face a sea of change in their industry due to new regulations specified by the Gramm-Leach-Bliley (GLB) law. They now have more time to adjust to the broker-dealer registration requirements as the compliance deadline has been extended. Without the extension, banks had to comply by the middle of last month. Now, they have until October 1.

A press release issued by the Securities and Exchange Commission cites the new exceptions to the definitions of "broker" and dealer" as something banks will need additional time to comply with.

It further states:

The Commission intends to engage in rulemaking shortly on these exceptions. In connection with the rulemaking, the Commission expects to provide the following temporary exemptions for banks. First, the Commission expects to exempt banks from the definitions of broker and dealer until October 1, 2001 for their existing securities activities. Second, the Commission expects that, until January 1, 2002, the compensation received by banks and paid by banks to their employees will not affect the availability of any exception from the definitions of broker or dealer.

CPAs Join Estate Tax Debate

A task force of the American Institute of Certified Public Accountants (AICPA) has completed a year-long study of the effects of the "death tax" and is positing options of either mild reform or total repeal.

"Modifying the estate tax by increasing the exemption and lowering tax rates above the exempt amount – or completely and rapidly repealing the taxes altogether – word be the best reform measures." the report of the Task Force says.

The task force was led by North Carolina State University associate professor Roby Sawyers.

"Although the transfer tax system historically targeted the very wealthiest Americans," says Sawyers, "a greater number of moderately wealthy folks with illiquid assets – including small businessmen and farmers, who traditionally have large amounts of money tied up in land and equipment; retirees who have recently profited from lucrative stock and retirement funds; and homeowners who have seen real estate values skyrocket – are apt to be taxed by this system in the near future."

The task force recommends that the the exemption amount raised to $5 million. In addition, it wants rates lowered on taxes assessed on asset amounts over the exemption.

A component of the task force study was a survey of CPAs who deal with estate planning and compliance issues.