FOR IMMEDIATE RELEASE
ICBA Calls Business Checking ILC Compromise Important First Step
Washington, D.C. (May 25, 2005) -- Camden R. Fine, President and CEO of the Independent Community Bankers of America (ICBA), issued the following statement today in response to House passage of the Business Checking Freedom Act of 2005.
"The bill to allow payment of interest on business checking accounts recognizes the important public policy mandate to maintain the separation of banking and commerce in its treatment of business checking powers for limited charter industrial loan companies (ILC). ILCs, unlike banks, can be owned by commercial companies due to a loophole in the Bank Holding Company Act (BHCA). The Gillmor-Frank compromise, which ICBA strongly supports, will bar ILCs owned by commercial firms from gaining this new power and becoming full service banks while still being exempt from the BHCA. While ICBA believes the ILC loophole should be closed entirely by bringing ILCs under the BHCA, this compromise is an important first step in that direction."
On the overall bill, ICBA favors increasing the number of permissible money market transactions to allow daily sweeps into and out of interest bearing accounts, to give banks more flexibility in how they provide interest to their commercial customers.