Legislation aimed at preventing retailers and other nonfinancial companies like automakers from operating a bank was approved by the U.S. House Financial Services Committee.
The bill, backed in a voice vote, would bar a company with less than 85% of revenue generated from financial services from owning and operating a type of bank known as an industrial loan corporation (ILC). The bill would allow existing ILCs owned by such companies.
The legislation next goes to the full House of Representatives for a vote. There is no companion legislation in the Senate.
ILCs are state-chartered banks with access to federal deposit insurance. They can offer deposit accounts, mortgages, credit cards, loans and other services.
U.S. banks, especially smaller ones, have voiced concern about a surge in ILCs over the last two decades, saying they could be forced out of business if retailers like Wal-Mart Stores