FOR IMMEDIATE RELEASE
ICBA, Groups Renew Call for Congress to Block Wal-Mart Bank
Washington, D.C. (July 24, 2006)—The Independent Community Bankers of America (ICBA) and 31 other organizations, including individual banks, trade associations and consumer advocates from various industries, renewed their call for Congress to urge the Federal Deposition Insurance Corp. to deny Wal-Mart's application for federal deposit insurance for an industrial loan corporation (ILC).
"In part due to Wal-Mart's size, approval of its application would risk setting policy in this area on an unalterable course without allowing Congress to decide some of the fundamental questions at stake," the groups said in a letter sent to Congress. "The policy implications raised here are too broad to allow that to happen."
The letter is the latest action of ICBA and 31 organizations that opposed a Wal-Mart bank during unprecedented hearings held by the FDIC in April.
"We urge you to act so that Congress is making these policy decisions," the organizations said in the letter. "Until Congress is able to pass legislation on ILC policy, we hope you will insist that the FDIC reject Wal-Mart's application or at least hold it until Congress has had the opportunity to consider the policies at stake and legislate."
ICBA has been leading the fight to keep commerce and banking separate. In the months following Wal-Mart's application to form an ILC, more than a dozen large commercial enterprises have applied for deposit insurance to open a bank, exploiting a loophole in federal law that allows a handful of states to charter industrial banks owned by commercial companies.
ICBA supports two legislative proposals in the House to address the ILC loophole. The Industrial Bank Holding Company Act of 2006 (H.R. 5746) sponsored by Reps. Paul Gillmor (R-Ohio) and Barney Frank (D-Mass.), would block commercial firms from acquiring or forming any new ILCs. Rep. Jim Leach (R-Iowa) introduced the Financial Safety and Equity Act of 2005 (H.R. 3882) which places ILC holding companies under the Bank Holding Company Act, subjecting them to Federal Reserve supervision, prohibiting ILC ownership by commercial firms and requiring commercial companies that own ILCs to divest them within five years.
For more information and to read the letter, go to www.icba.org.