Community Bankers Association of Illinois

CO-SPONSORS NEEDED TO CLOSE ILC LOOPHOLE - ACT TODAY!
07/19/06

Reps. Paul Gillmor (R-Ohio) and Barney Frank (D-Mass.) have introduced legislation to ensure that Wal-Mart, Home Depot or other commercial firms are prevented from chartering or acquiring an Industrial Loan Charter. The CBAI-backed Industrial Bank Holding Company Act (H.R. 5746) would prohibit commercial firms (those that derive at least 15% of their revenues from commercial activities) from chartering or acquiring an industrial loan corporation (ILC) after June 1, 2006; limit the activities and prevent branching outside their home states of commercially-owned ILC's chartered or acquired between October 1, 2003 and June 1, 2006; and would bolster the FDIC's authority to conduct consolidated supervision of ILC's at the holding company level.

There are currently 14 pending ILC applications before the FDIC, including applications from Wal-Mart, Home Depot, DaimlerChrysler, Blue-Cross Blue Shield, and Berkshire Hathaway. If enacted, this legislation will prevent commercial firms such as Wal-Mart and Home Depot from chartering or acquiring an ILC, and it will preclude certain existing ILC's, such as Target's bank, from expanding their business activities and branching out of state.

WE NEED CO-SPONSORS!

The more co-sponsors this bi-partisan legislation can gather, the stronger the message to the FDIC that it should not act hastily. Last month, Reps. Frank & Gillmor co-authored a letter (co-signed by 98 other House members) to the FDIC that urged the FDIC to impose a moratorium on ILC applications until Congress has had a chance to act. The FDIC could still act at anytime regardless of the written request not to do so. If the FDIC does act to approve one or more commercially-owned ILC's in the interim, H.R. 5746 can give Congress a vehicle to act quickly to overturn the FDIC's actions. Please contact your representative in the U.S. House immediately to urge them to co-sponsor H.R. 5746! Call 202-225-3121 and ask for your representative by name. If you are not sure who your U.S. Representative is, please click here.

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