Community Bankers Association of Illinois


The FDIC received more than 700 comment letters in response to Wal-Mart's application to charter an industrial loan company in Utah. Almost all of the comments have been against granting the application. Many comments have been skeptical of Wal-Mart's claim's that it would use the charter only for back-office processing. Included in the comments is a joint letter from Reps. Barney Frank (D-Mass.), and Paul Gillmore (R-Ohio). The two lawmakers urged public hearings and access to more detailed information.

FDIC Chairman Donald Powell has been quoted as saying that the application would not be treated differently than any others. Federal Reserve officials have maintained that the FDIC cannot properly examine an ILCs parent, and that problems there could affect the bank's health.

In a recent subcommittee hearing, Federal Reserve Governor Mark Olson testified that a provision of a regulatory relief bill under consideration would let many ILCs branch nationwide without the same supervision as other banking companies. Although compromise language would allow branching rights to any ILC that was established before Oct. 1, 2003, or is owned by a company that derives at least 85% of its business from financial activities, Mr. Olson said the bill lacked specific guidance on how regulators should make such a determination.

The Independent Community Bankers of America remains the only national financial institutions trade group formally opposed to the Wal-Mart application. Amazingly, the current Chairman of the American Bankers Association made the following comment in a recent interview with the American Banker: "My personal view is that I don't find myself opposed to the Wal-Mart application."

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