FOR IMMEDIATE RELEASE
ICBA Calls on Congress to Quickly Close ILC Loophole; Commends Lawmakers for Advancing H.R. 698
More Than 100 Members of Congress Co-Sponsor Bi-Partisan Legislation
Washington, D.C. (April 25, 2007)—The Independent Community Bankers of America (ICBA), stating that commercial ownership of industrial loan companies (ILC) poses tremendous risk to the nation's financial system and to the deposit insurance fund, called on Congress to quickly pass legislation to preserve the wall that separates banking and commerce.
"Now is the time to close the ILC loophole," said James P. Ghiglieri, Jr., ICBA chairman and president of Alpha Community Bank, Toluca, Ill., testifying before the House Financial Services Committee on pending ILC legislation. "The potential for commercial firm ownership of a bank continues to threaten our nation's historic separation of banking and commerce and undermine our system of holding company supervision, harming consumers and communities and threatening financial stability."
"The ILC specter continues to loom over the nation's financial system and Congress must act to close the loophole once and for all by passing the Industrial Bank Holding Company Act of 2007 (H.R. 698)," Ghiglieri said.
While Wal-Mart has withdrawn its application to establish a federally-insured ILC, these actions do not diminish the need to close the loophole. "Other applications are pending; more could be filed in the future and Wal-Mart could re-file its application at any time. Only Congress can close the ILC loophole and address both the separation of banking and commerce and the need for consolidated supervision of ILC holding companies," Ghiglieri said.
H.R. 698 represents a good compromise, ICBA said. "Under the measure, institutions that are already in business could remain in place and financial companies could continue to acquire, establish, and operate ILCs. This bill addresses key concerns without needlessly disrupting ongoing activity, and at the same time, gives the FDIC the basic tools it will need to be an effective consolidated regulator," Ghiglieri said.
ICBA commends Rep. Barney Frank (D-Mass.), Rep. Paul Gillmor (R-Ohio) and more than 100 members of Congress for co-sponsoring this bi-partisan legislation to close the ILC loophole and help protect the safety and soundness of the deposit insurance fund and our banking system.
Read ICBA's complete testimony at www.icba.org.