Bill to Ban Wal-Mart Bank Introduced in Congress
The top Democrat and Republican on the U.S. House Financial Services Committee today introduced a bill that would ban Wal-Mart and other commercial companies from owning a type of bank known as an industrial loan company (ILC).
The bill was co-sponsored by Barney Frank of Massachusetts, a Democrat who is chairman of the panel, and Paul Gillmor of Ohio, the ranking Republican.
"We are seeking to prevent the expansion of a historically small special niche into a full-fledged alternative banking system, which dissolves the line between banking and commerce," Frank said in a statement.
The legislation came just two days before the Federal Deposit Insurance Corporation holds a meeting to decide whether to extend a six-month moratorium on ILC applications. Banking experts generally expect the FDIC to keep the freeze in place for applications by commercial firms while Congress debates legislation.
The House bill, called the Industrial Bank Holding Company Act of 2007, prohibits a company from owning an ILC unless it generates at least 85 percent of its revenue from activities that are financial in nature.