Democrat Frank To Ask FDIC To Extend Industrial-Bank Moratorium
Posted on October 27, 2006 by webteam
From today’s Bloomberg News:
Representative Barney Frank will ask a federal bank regulator to extend until April its six-month moratorium on considering applications filed by Wal-Mart Stores Inc. and other companies to own industrial banks.
The moratorium imposed by the Federal Deposit Insurance Corp. to study the policy behind commercial ownership of the banks ends at the beginning of February. The newly elected Congress will still be getting organized then, Frank said in an interview today.
“I want us to be in session and ready to act if they do something,’’ said Frank, the ranking Democrat on the House Financial Services Committee who stands to become chairman if his party takes control of Congress in the Nov. 7 elections. “We can be ready to pass legislation if the FDIC acts.’’
In July, the FDIC said it would take six months to examine the risks so-called industrial banks pose to the U.S. financial system and whether policy changes are needed.
Frank, whose district is in Massachusetts, opposes allowing commercial companies to own the limited-service, state-chartered banks. He introduced legislation in July with Representative Paul Gillmor, an Ohio Republican, to ban the practice.
The growth in industrial banks drew attention from lawmakers after Wal-Mart filed an application last year to open one in Utah. They’ve become an option for commercial companies that want to own banks, in part because the banks’ parent companies are exempt from Federal Reserve oversight.
Click here to read more about ILCs and Wal-Mart’s bid to obtain one.
