FOR IMMEDIATE RELEASE
ICBA Asks FDIC to Reject Commercial Firms’ Entry into Banking
FDIC on Solid Legal Ground to Reject Pending Applications for Deposit Insurance
Washington, D.C. (January 18, 2007)—The Independent Community Bankers of America (ICBA) called on the Federal Deposit Insurance Corporation to let Congress, rather than federal regulators, decide whether industrial loan corporations should be owned by non-financial firms like Wal-Mart, Home Depot and others. ICBA made its comments this week in a letter to FDIC Chairman Sheila Bair.
"No one should fall prey to the 'grand illusion' that commercial firms which own a bank can't fail," said Camden R. Fine, ICBA president and CEO. "If the world's largest commercial firms own a bank, and the commercial firm was to fail, the FDIC insurance fund and taxpayers would have the liability."
In its letter, ICBA said that the FDIC Board is on solid legal ground to reject the current applications of Wal-Mart and Home Depot. "If the FDIC board must act, it should reject these applications because they place undue risk on the federal deposit insurance fund and increase the liability of the nation's taxpayers to an unacceptable level," Fine said.
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.
Read the full text of the letter at www.icba.org.