FOR IMMEDIATE RELEASE
33 State Community Bank Associations Endorse Gillmor-Frank Bill to Close ILC Loophole
Bill Would Keep Wal-Mart, Home Depot Out of Banking
Washington, D.C. (Sept. 26, 2006)—Thirty-three state community bank trade associations have endorsed an Independent Community Bankers of America (ICBA)-supported measure that would close the industrial loan corporation (ILC) loophole.
"Having the endorsement of the state community banking associations shows how important it is for Congress to not only fully examine the issue of large commercial enterprises owning FDIC-insured institutions through an ILC charter, but to act quickly to protect our nation's current financial system," said Terry J. Jorde, ICBA chairman and president and CEO of CountryBank USA, Cando, N.D. "ICBA is extremely pleased to support this important legislation. We strongly encourage Congress to pass the legislation this year before the FDIC's six-month moratorium on ILC formations or acquisitions expires."
The Industrial Bank Holding Company Act (H.R. 5746), introduced by Reps. Paul Gillmor (R-Ohio) and Barney Frank (D-Mass.) would close a loophole in the Bank Holding Company Act by prohibiting Wal-Mart, Home Depot and other commercial firms from owning industrial banks, and ensuring that all industrial bank holding companies are adequately regulated.
In a separate action this summer, the Federal Deposit Insurance Corp. placed a six-month moratorium on applications for deposit insurance by ILCs, as well as on notices of change in bank control for existing ILCs. The moratorium expires at the end of January, 2007.
ICBA has long supported our nation's policy of maintaining the wall that separates banking and commerce. Ownership of a bank by a commercial enterprise concentrates economic power giving the enterprise control over the product, the payment system, the method of payment, as well as the allocation of credit.
"The over concentration of economic power diminishes consumer choice and smothers small businesses and job creation," said Camden R. Fine, ICBA president and CEO. "ICBA stands for the separation of banking and commerce in order to promote a diverse economy rich in choice for all consumers and businesses alike."
Read the state associations' endorsement letter at www.icba.org.