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"NIXING MIXING" BANKING AND COMMERCE
February 2, 2007 - As reported in the Special Capitol Comments on Thursday, the FDIC extended for a full year its moratorium on the applications for industrial loan companies (ILCs) owned by commercial firms. The unanimous decision by the FDIC’s board of directors gives Congress more time to act on ICBA/IBAT-supported bipartisan legislation reintroduced last week (HR 698) that will close the ILC loophole in the Bank Holding Company Act, and it also halts movement, at least until January 31, 2008, by Wal-Mart, Home Depot and other commercial firms to own and operate ILCs.
This is a great victory for both ICBA and IBAT which have led the fight to keep commerce and banking separate, and we will continue to fight until the opportunity for commercial firms to own banks is permanently closed through legislation. We thank the FDIC for extending the moratorium, and we also call upon IBAT members to contact their members of Congress to urge the passage of H.R. 698.
We are also pleased to report that House Financial Institutions Chairman Burt Solomons introduced an IBAT initiative to ban bank offices from the premises of commercial affiliates in Texas. Similar legislation has passed in several other states. This is very similar to legislation filed earlier by Representative Leibowitz. We are appreciative of the efforts of these two gentlemen, and will continue to fight at both the state and federal levels to keep banking and commerce appropriately separate.
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