Community Bankers Association of Illinois

CBAI ANNOUNCES INITIATIVE TO KEEP WAL-MART BANK OUT OF ILLINOIS
11/22/06

CBAI'S Board of Directors unanimously endorsed the initiation of legislation which would effectively prevent Wal-Mart, Home Depot and other commercial firms which own or seek to own industrial loan companies from establishing bank branches on their Illinois premises or property.

The initiative is in anticipation of a ruling by the Federal Deposit Insurance Corporation on an application by Wal-Mart for an industrial loan company (ILC) charter in Utah in July, 2005. The FDIC is set to rule on the application by January 31, 2007. The fight against approval of the application has been led by the Independent Community Bankers of America, which successfully fought for a moratorium on ILC applications or purchases until January 31.

Although commercial firms have long been prohibited from engaging in banking, the ILC charter represents a loophole in the law. Legislation is pending in Congress (H.R. 5746 and H.R. 3882) which would close the loophole. CBAI's Illinois initiative is a defensive measure designed to prevent a commercially-owned ILC from establishing a branch on its premises or property in the event the Wal-mart application is approved and legislation at the federal level is unsuccessful. Currently under Illinois law, an ILC from a state with reciprocal branching laws would not be restricted as to the location of its branches.

CBAI's initiative differs from an effort last year to prevent commercially-owned ILCs from establishing branches in Illinois. Since that time the federal financial regulators have articulated guidance on how such state efforts should be legally structured. In addition, CBAI has already contacted labor groups which spearheaded the fight against Wal-Mart in Chicago by initiating the so-called "Big Box" Living Wage Ordinance in Chicago. Those groups have indicated their support for the CBAI initiative. We will also be calling upon other financial trade groups in an effort to form a broad-based coalition. We will keep you apprised of our progress.

  800.736.2224 (IL) | 217.529.2265  
  DISCLAIMER: The association is not responsible for and has no control over the subject matter, content, information, or graphics when viewing links attached to this association's site.