The Securities and Exchange Commission yesterday split ranks over whether Congress should order a moratorium on moves by the banking and securities industries into each others' business.
In response to a plea from the Securities Industry Association, the lobbying group for the brokerage business, commissioners Bevis Longstreth, Barbara Thomas and James Treadway indicated support for a temporary halt to cross-industry activities.
However, chairman John S.R. Shad and commissioner John Evans opposed such a ban because they said it would delay an ultimate solution by Congress.
The split is another indication of the deep division on this issue that pits the Reagan administration against Congress, the Treasury against the Federal Reserve, the Senate against the House, and the banking and securities industries against each other.
A majority of the SEC members agreed with the SIA that the Glass-Steagall Act prohibition against banks underwriting corporate securities should be maintained.
But Evans, whose term expires this fall, was unusually outspoken in his objections. He told industry representatives that Treasury Secretary Donald T. Regan "knows what he's doing" in accelerating deregulation, the Federal Deposit Insurance Corp. appears to be on sound legal ground in allowing state banks to underwrite corporate securities, and no one can turn the clock back to a system of complete separation of investment and commercial banking.
Shad chided the SIA over its failure to push the discount brokerage business. While reluctant to engage in price cutting themselves, the brokers object to combinations like the Bank of America acquisition of Charles Schwab & Co., a discount broker. Shad urged the industry to make discount brokerage competitive instead of conceding it to banks.