FOR IMMEDIATE RELEASE
ICBA Statement on Legislation to Close the Industrial Loan Company Loophole
Washington, D.C. (March 15, 2007)—James P. Ghiglieri, Jr., chairman of the Independent Community Bankers of America (ICBA) and president of Alpha Community Bank, Toluca, Ill. issued the following statement on Rep. Paul Gillmor's (R-Ohio) remarks today on the future of industrial loan companies. Gillmor is the senior Republican on the House Financial Services Financial Institutions Subcommittee.
"ICBA applauds Rep. Gillmor for his unflagging support for maintaining the separation of banking and commerce and for his co-sponsorship of the Industrial Bank Holding Company Act (H.R.698). We agree with Rep. Gillmor that today's revelation about Wal-Mart's expressed desire to offer a broad range of financial services confirms the retail giant's true intent to enter retail banking using the ILC charter.
"There is no doubt that a commercial company with the size and reach of Wal-Mart poses significant risk to the safety and soundness of our nation's financial system, our overall economic health and to the Deposit Insurance Fund itself if it owned an FDIC-insured ILC. Now that we know Wal-Mart's true intent is to enter retail banking through the backdoor, we urge Congress to quickly pass the Frank-Gillmor bill."
Gillmor and Financial Services Committee Chairman Barney Frank (D-Mass.) recently re-introduced ICBA-endorsed legislation that would preserve the legal wall keeping banking and commercial activities separate. The Industrial Bank Holding Company Act (H.R. 698) would prevent Wal-Mart, Home Depot and other non-financial companies from using an ILC charter loophole to skirt the law preventing commercial firms from owning FDIC-insured financial institutions.
The House Financial Services Committee has scheduled a hearing on March 22 on the ILC issue. ICBA Chairman Ghiglieri will present testimony.