Clinton Signs Financial-Services Bill,
                   But Cautions About Privacy Shortfalls

                   By MICHAEL SCHROEDER
                   Staff Reporter of THE WALL STREET JOURNAL

                   WASHINGTON -- President Clinton signed into law a "truly historic"
                   financial-services overhaul, but cautioned that it falls short on privacy
                   protections.

                   The president voiced his strong support for the
                   legislation, which he said will save consumers
                   billions of dollars, but said vigilance was needed to
                   monitor and implement the many provisions of the
                   400-plus page bill. In particular, he said, stronger
                   privacy protections are needed.

                   "Without restraining the economic potential of new
                   business arrangements, I want to make sure every
                   family has meaningful choices about how their
                   personal information will be shared within
                   corporate conglomerates," he told congressional
                   leaders and top financial regulators at the signing
                   ceremony.

                   The measure, which lifts the Glass-Steagall barriers dating back to the
                   Depression, allows banks, securities firms and insurance companies to
                   form one-stop financial conglomerates marketing a range of financial
                   products such as annuities, certificates of deposit, stocks, and bonds.
                   Proponents believe consumers will benefit from more convenience, a wider
                   range of financial products, and lower fees.

                   "With this bill, the American financial system takes a major step forward
                   toward the 21st Century, one that will benefit American consumers,
                   business and the national economy," said Treasury Secretary Lawrence
                   Summers.

                                     Currently, the bill requires financial firms to
                                     disclose privacy policies and to give customers the
                                     option of blocking the sharing or selling of
                                     information to outside companies. The bill also
                                     says that state laws with more stringent protections
                                     take precedence over privacy provisions in this
                                     new federal law.

                                     While the bill directs the Treasury Department to
                                     study privacy practices in the financial-services
                                     industry, Mr. Clinton also directed the National
                                     Economic Council to work with the Treasury and
                                     the Office of Management and Budget "to
                   complete that study and give us a legislative proposal which the Congress
                   can consider next year."

                   Last week, new bills to strengthen privacy were introduced in both the
                   House and Senate. The proposals -- sponsored by Reps. Edward Markey
                   (D., Mass.) and Joe Barton, (R., Texas) and Sens., Richard Shelby (R.,
                   Ala.) and Richard Bryan (D., Nev.) -- call for extending the right of
                   consumers to block financial firms from passing private financial
                   information to bank, insurance and securities affiliates -- in addition to
                   outside firms such as telemarketers.

                   As the financial-services overhaul legislation moved through Congress,
                   companies fought bitterly for the ability to share information among
                   affiliates. Using customer information to cross-market among the various
                   financial operations is a prime reason for creating financial conglomerates,
                   they argued.