July 16, 2001

Jonathan G. Katz
Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549-0106

Re:  SEC Bank Broker-Dealer Interim Final Rules (Release File No. S7-12-01)

Dear Mr. Katz:

Zions Bank ("Zions") appreciates the opportunity to provide comments on the Interim Final Rules ("Interim Rules") issued by the Securities and Exchange Commission (the "Commission") regarding the "push-out" provision of the Gramm-Leach-Bliley Act ("GLB Act"). Simply stated, we believe that the manner in which the Interim Rules were issued is unfair; that there are significant problems with a number of the provisions of the Interim Rules, and that the Interim Rules adopt an approach that is fundamentally inconsistent with the principles of functional regulation that underlies the GLB Act.

Let me begin by stating that we have reviewed the June 29, 2001 comments presented to you jointly by the Federal Reserve Board, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency ("banking agencies"), and fully support their position in this matter. Following is a brief discussion of what we consider to be the most significant problems associated with the Interim Rules, including a reiteration of some of the concerns expressed by the banking agencies.

First, we are concerned with the manner in which the Interim Rules were issued. As the banking agencies pointed out in their comments, the Commission should have followed the normal notice and public comment process in issuing the Interim Rules. Given the magnitude of the impact of the Interim Rules on the traditional practices of bank and bank clients, we agree with the banking agencies that the process used by the Commission of publishing Interim Rules without first receiving the benefit of public comment is fundamentally unfair and inconsistent with standard practice.

We further agree with the banking agencies that it is wrong to require banks to establish procedures to comply with the Interim Rules before the Commission has reviewed public comments and addressed the significant concerns raised by the banking industry. While the Interim Rules require substantial modification, we would need to take steps now to comply with them by the effective date, since we have no way of knowing how or when the rules may be changed.

To the provisions of the Interim Rules, we find the rules create an environment that is extremely "unfriendly" to the consumer and unnecessarily burdensome on banks. In the case of our bank, the Interim Rules would significantly disrupt and may force the discontinuation of major lines of business for us and longstanding relationships with some of our clients. Transferring, or "pushing out," trust accounts from our trust department to an affiliated broker-dealer would be a mammoth undertaking, involving considerable difficulties. This includes the time and money involved in changing legal documentation; obtaining necessary regulatory approvals; altering business processes, including operating policies and procedures and reporting relationships; adapting control structures; amending appropriate books; obtaining necessary employee licenses; and much more. And, if the Interim Rules force trust activities out of the bank, clients will be forced into fragmented relationships with their chosen trustee and a third-party broker-dealer, and be burdened with additional costs that are entirely unnecessary.

To summarize, we support the banking agencies' belief that the Interim Rules are contrary to the plain language of the GLB Act and its legislative history in critical ways, and that there are critical flaws in the rules. Given that, we join the banking agencies in strongly urging the Commission to take immediate steps to formally treat the Interim Rules as proposed rules, and allow the time necessary to address the concerns we have outlined in this letter. We additionally ask that the effective date of the GLB Act's "push-out" provisions be extended until after the proposed rules are issued as final rules. And lastly, we believe that at least a one-year transition period should be provided for banks to bring their operations into compliance once the revised rules become final.

Thank you again for the opportunity to provide comments, and for considering our comments. We would be happy to make ourselves available to assist you as you address our concerns in an effort to develop rules that are consistent with both the spirit and language of the GLB Act.


A. Scott Anderson
President and Chief Executive Officer
Zions First National Bank