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WASHINGTON -- Big retailers like Wal-Mart and Home Depot may be barred from owning industrial loan corporations, or ILCs, thanks to a measure passed yesterday by the U.S. House of Representatives.
The House passed H.R. 698, the Industrial Bank Holding Company Act of 2007, by a vote of 371 to 16, according to published reports. The legislation was co-sponsored by Congressmen Paul Gillmor, R-Ohio, the ranking member of the Financial Institutions Subcommittee, and House Financial Services Committee Chairman Barney Frank, D-Mass., along with Congressman Jim Marshall, D-Ga.
The lawmakers said the purpose of the bill is to restore the historic separation between banking and commerce, prevent branch banking by some commercially-owned ILCs, and bolster the supervisory authorities of the FDIC as a holding company regulator.
Gillmor said he looks forward to "getting a bill to the President before the end of the FDIC-imposed moratorium" in early 2008. The bill will now go before the Senate.
The measure would prohibit new commercially-owned ILCs effective Jan. 29, 2007. This provision would prohibit Wal-Mart, Home Depot and several other commercial firms from chartering or acquiring an industrial bank. For ILCs already owned by commercial firms, the bill would restrict expanded business plans and branching across state lines.
In March, Wal-Mart Financial Services withdrew its controversial application seeking to start its own bank.