Moratorium Extended on New ILC Banks by Commercial Firms

Published: February 8, 2007

<table width="507"><tbody><tr><td class="itemheader"><span style="FONT-WEIGHT: 900; FONT-SIZE: 14px; MARGIN-BOTTOM: 3px; PADDING-BOTTOM: 3px; COLOR: #003399; PADDING-TOP: 3px; FONT-FAMILY: Arial, Helvetica, sans-serif"><b></b></span></td></tr><!– Story –><tr><td class="blacktext" width="500">In a moved backed by NAR, the Federal Deposit Insurance Corporation (FDIC) has extended its moratorium on industrial loan company (ILC) applications from commercial firms. ILCs are a type of state-chartered, federally insured bank that may be owned by commercial firms. NAR has strongly urged the FDIC to extend the moratorium so Congress an decide whether to tighten or close the ILC loophole. In the House, Rep. Paul Gillmor (R-Ohio) and Financial Services Committee Chairman Barney Frank (D-Mass.) have introduced a bill that would do that. The Industrial Bank Holding Company Act of 2007 (H.R. 698) would permit only financial firms (those with no more than 15 percent of their revenue from commercial activities) to apply for ILC ownership. In a letter to FDIC Chairman Sheila Bair, NAR President Pat Vredevoogd Combs thanked the FDIC for extending the moratorium, explaining that commercial ownership of banks results in conflicts of interest and unfair competition, putting the financial system at risk. </td></tr></tbody></table>

Last modified: February 8, 2007 at 8:52 am | Originally published: February 8, 2007 at 8:52 am
Printed: September 28, 2020