FOR IMMEDIATE RELEASE
ICBA Asks FDIC to Extend Comment Period on ILCs
More Time Needed for Adequate Public Input
Washington, D.C. (September 28, 2006)—The Independent Community Bankers of America (ICBA) urged the FDIC to extend the comment period on regulation and supervision of industrial loan companies and their parent companies an additional 60 days to allow adequate time for all interested parties to submit their views.
"The regulatory, supervisory and policy issues surrounding industrial loan companies and industrial banks are of serious consequence to the underlying fundamental structure, safety and soundness of our country's financial and economic system," said Camden R. Fine, ICBA president and CEO. "Decisions on these issues have the potential to wreck havoc on America's families, small businesses and local communities."
While ICBA commended the FDIC for imposing a six-month moratorium on ILC formations or acquisitions and for asking for additional comments on the issue, the association said the 45-day comment period is too short since it overlaps with the summer congressional recess and a short, busy pre-election session. Published in the Federal Register on August 23, the comment deadline is October 10, leaving little time for Congress and all interested private sector parties to weigh in.
"The ILC issue has engendered unprecedented public interest, as evidenced by the thousands of letters received by the FDIC on individual ILC applications and the interest in public hearings held by the agency earlier this year," ICBA said in a letter to the agency. "FDIC is to be commended for its efforts to reach out to the public throughout this process to ensure all voices are heard."
The Sound Banking Coalition, of which ICBA is a founding member, also requested an additional 60 days. The Coalition consists of financial, retail and labor groups, working to close the ILC loophole to keep big-box stores, like Wal-Mart and Home Depot, out of the banking business.
ICBA has been leading the effort to maintain our nation's long-standing policy against the mixing of banking and commerce. Allowing commercial firms to own banks concentrates economic power, jeopardizes the impartial allocation of credit, and poses serious competitive issues for local merchants. In addition, owners of ILCs are exempt from regulation and supervision under the Bank Holding Company Act, making them a threat to the safety and soundness of our financial system.
ICBA and 33 state banking associations support the Industrial Bank Holding Company Act (H.R. 5746) introduced by Reps. Paul Gillmor (R-Ohio) and Barney Frank (D-Mass.) which would close the ILC loophole in the Bank Holding Company Act, by prohibiting commercial firms from owning industrial banks and ensuring adequate regulation of all industrial bank holding companies.
To read the ICBA letter and for more information on this issue, visit www.icba.org.