Bill Barring ILC Banks Passed by House
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Legislation barring commercial companies like Wal-Mart and Home Depot from owning a special sort of bank overwhelmingly cleared the House yesterday.
The bill, which passed 371-16, would prohibit nonfinancial companies from setting up or owning so-called industrial loan companies, federally insured institutions that can issue credit cards, make loans, and take deposits. ILCs have been proliferating in recent years: there are now 58 with a total of about $200 billion in assets. Thirty-one are based in Utah, one of only seven states that grant charters for such banks.
Critics say the growth of the industrial banks dangerously blurs the line between banking and commerce, concentrating assets in the hands of a few big companies, stifling competition and hurting consumers.
