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AIG Allowed To Run Savings Bank

December 10, 1999

WASHINGTON (AP) _ American International Group Inc., one of the largest U.S. insurance companies, has won permission from federal regulators to operate a federal savings bank.

The Office of Thrift Supervision, part of the Treasury Department, announced the approval on Friday. The company, known as AIG, is the latest in a string of insurance companies, securities firms and other businesses outside the banking industry to get new federal thrift charters in recent months.

In October, for example, the thrift agency granted the same powers to Aetna Inc., one of the nation’s largest life and health insurers, and to mutual fund giant Fidelity Investments.

The latest approval comes a few weeks after Congress enacted sweeping new legislation rewriting the financial services laws and allowing banks, insurance companies and securities firms to merge and sell each other’s products.

By approving applications from a number of financial companies outside the banking industry, the federal thrift regulators had chipped away at the Depression-era laws separating the financial services industries before Congress acted.

AIG, based in New York City, is a major commercial and industrial insurer with some $259 billion in assets which also engages in securities brokerage, consumer finance, aircraft leasing and data processing. It also owns the Stowe Mountain Ski Resort in Vermont.

The company plans to operate a full-service savings bank in Wilmington, Del., with most of its business to be done by telephone and mail.

AIG spokesman Ned Burke said the company had no comment on the thrift charter approval.

Other companies receiving new savings and loan charters recently include agribusiness giant Archer Daniels Midland Co., long-distance telephone company Excel Communications Inc. and coffin manufacturer Hillenbrand Industries.

Several other non-financial companies, including department store chains Wal-Mart Stores Inc. and Dillard’s Inc., had to withdraw their pending thrift charter applications after enactment of the new financial overhaul law, which prohibits the mixing of commerce and banking.

The new law did not affect non-financial companies that had already had their applications approved.

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