Community Bankers Association of Illinois

TIME IS RUNNING OUT FOR ACTION ON ILC'S!
01/11/08

Some DC observers wonder if ILC legislation can still be passed this session or not. Since Wal-Mart withdrew their ILC application, the sense of urgency that propelled ILC legislation through the House with an overwhelming 371-16 majority vote, seems to have been lost. The U.S. House passed this legislation (H.R. 698) to address the commercial ownership of ILC's in May, 2007. Companion legislation was introduced in the Senate (S. 1356) by Senators Sherrod Brown (D-OH), Tim Johnson (D-S.D.) and others and has been awaiting action in the Senate Banking Committee. Illinois Senators Assistant Majority Leader Richard Durbin and Barack Obama are listed co-sponsors on this legislation. The Chairman of the Senate Banking Committee, Senator Chris Dodd (D-CT.), introduced ILC legislation in November of 2007 that places even stricter standards and restrictions on ILC's. Dodd, who recently dropped out of the 2008 Presidential race, is now considered a "wild card" by DC observers on this and other issues before the committee. The Sub-prime mortgage crisis facing the nation, possible bankruptcy reform and GSE reform legislation are all on the committee agenda when Congress reconvenes on January 22, 2008. This only leaves 8 days to work out a compromise before the FDIC moratorium on commercial ILC applications expires on January 31, 2008! FDIC Chairman Sheila Bair has stated many times that this moratorium will not be extended, however, recent comments have made it clear that an "informal moratorium" will exist. The agency will likely take its time to process the applications it has received. American Banker has quoted John Bovenzi, the chief operating officer at the FDIC as saying that "there will… be a period of review and exchange before bring[ing] anything… to the board for a decision." CBAI will continue to keep you updated on this important issue as it develops. Thank you for your active participation on this issue!
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