FOR IMMEDIATE RELEASE
ICBA Commends Congress for Urging Six-Month Extension of ILC Moratorium
ICBA Letter Also Calls for FDIC to Extend the Moratorium
Washington, D.C. (December 6, 2006)—The Independent Community Bankers of America (ICBA) commends 107 members of Congress for asking the FDIC to extend the moratorium on approving any applications for deposit insurance or change in control for commercial enterprise-owned industrial loan corporations (ILC) beyond January 31, 2007 so that Congress has ample opportunity to consider the issue.
"ICBA commends lawmakers for their determination to fully examine the implications of any breach to the historic wall that separates commerce and banking," said Camden R. Fine, ICBA president and CEO. "There are far reaching and detrimental consequences that approval of commercial ILC applications could have on the basic structure of our financial and economic system and on local communities and small business."
In the Congressional letter to FDIC Chairman Sheila Bair, lawmakers urge the FDIC to extend the current ILC moratorium another six months to allow the new Congress time to examine the issue of commercial firms owning FDIC-insured banks via ILCs. Lawmakers also told the FDIC they do not object to lifting the moratorium on financial firms that may have pending applications to start or acquire an ILC.
Reps. Paul Gillmor (R-Ohio) and Barney Frank (D-Mass.) are the principal sponsors of the letter, as well as of H.R. 5746 - an ICBA supported measure -- that would prohibit commercial firm ownership of ILCs. The lawmakers expect to introduce similar legislation in 2007 as H.R. 5746 is not expected to move in the final days of this Congress.
ICBA has been leading efforts to maintain the nation's historic separation of banking and commerce and to close the ILC loophole in the Bank Company Holding Act. In an October 10 letter to the FDIC, ICBA called on regulators to extend the ILC moratorium. ICBA believes that the principle and practice of keeping banking and commerce separate has served our nation and local communities well by guarding against excessive concentration of economic power, ensuring the impartial allocation of credit and safeguarding against improper extension of the deposit insurance safety net and risks to the Deposit Insurance Fund.
For more information on this issue and to view the letter, visit www.icba.org.