FOR IMMEDIATE RELEASE
ICBA Urges Senate to Advance Legislation to Close the Industrial Loan Company Loophole
ICBA Thanks Senator Dodd for Leadership on This Important Issue
Washington, D.C. (Oct. 4, 2007)—The Independent Community Bankers of America (ICBA), noting that commercial ownership of industrial loan companies (ILC) poses tremendous risk to the nation's financial system, to the deposit insurance fund and to consumers, urged the U.S. Senate to quickly advance legislation to close the ILC loophole and preserve the wall that separates banking and commerce.
"The ILC loophole threatens our nation's historic separation of banking and commerce, weakens our local communities and undermines our system of holding company supervision," said James P. Ghiglieri, Jr., ICBA chairman and president of Alpha Financial Group, Inc., in a written statement to the Senate Banking Committee. "ICBA thanks Chairman Dodd for his leadership and for recognizing the importance of this issue for the good of our nation's communities and consumers."
ICBA noted that while Wal-Mart has withdrawn its ILC application, other companies such as Home Depot have applications pending and legislation is needed. If the FDIC moratorium is allowed to expire at the end of January without legislation, Wal-Mart could reapply for an ILC charter, and other commercial firms are sure to follow. In its statement, ICBA said that S.1356 is good legislation that allows institutions already in business to remain in place. Financial companies could continue to acquire, establish, and operate ILCs. Only commercial firms would be further prevented from using the ILC loophole to acquire FDIC-insured institutions.
ICBA commends Senate Banking Committee Chairman Dodd for recognizing the importance of the ILC issue and calling for the hearing. ICBA also commends the leadership of Sens. Tim Johnson (D-S.D.), Sherrod Brown (D-Ohio) and Wayne Allard (R-Colo.), the original co-sponsors of the Industrial Bank Holding Company Act (S.1356).
The Independent Community Bankers of America, the nation’s voice for community banks, represents 5,000 community banks of all sizes and charter types throughout the United States and is dedicated exclusively to representing the interests of the community banking industry and the communities and customers we serve. For more information, visit www.icba.org.