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ICBA Statement on Sen. Johnson’s Comments on Industrial Loan Corporations

Washington, D.C. (June 12, 2006)—Camden R. Fine, president and CEO of the Independent Community Bankers of America (ICBA), issued the following statement applauding Sen. Tim Johnson (D-S.D.) for his comments on industrial loan corporations (ILCs) during nomination hearings on Sheila Bair to be chairman of the Federal Deposit Insurance Corp. (FDIC):

"One of the unique strengths of the U.S. system is its prohibition against mixing banking and commerce. This prohibition has helped to create the strongest and most stable banking system in the world. Our nation's two largest retailers - Wal-Mart Stores and Home Depot - want to exploit the last remaining exception in the law to circumvent that prohibition. Senator Johnson is right to question, in light of this, whether or not the original purposes of ILCs have moved beyond congressional intent. Certainly, given his testimony at the FDIC Wal-Mart hearings, former Senator Garn, the author of the ILC exception in the law, thinks so."

"We also commend Senator Johnson for reaching out to Senator Bennett [Sen. Robert Bennett] to find a solution to this problem. Senator Bennett's home state of Utah is home to more ILCs than any other state in the country. But Congress as a whole should answer the ultimate question of whether companies like Wal-Mart and Home Depot should be able to sneak under the ILC loophole."