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For Immediate Release: July 28, 2006

Contact:	Steve Adamske (Frank), 202-225-7141 Bradley Mascho (Gillmor), 202-226-4319

FRANK AND GILLMOR COMMEND FDIC FOR SIX MONTH MORATORIUM ON ILCS

Washington, DC- U.S. Representatives Barney Frank and Paul E. Gillmor made the following statements on today's decision by the Federal Deposit Insurance Corporation (FDIC) to set a six-month moratorium on the chartering or acquisition of Industrial Loan Companies (ILC):

 

Rep. Frank said:

 

            "I am pleased that the FDIC has decided to implement a moratorium on the chartering or acquisition of ILCs.  Chairman Bair has taken the right step in giving Congress the ability to consider the implications of the increasing efforts to use ILC charters to avoid the long-standing separation of banking and commerce."

 

Rep. Gillmor said:

 

"The FDIC's decision to impose this moratorium is an appropriate response to the rise in ILC applications and certainly consistent with the wishes of many Members of Congress.  This gives Congress some needed time to hold additional hearings and to review the recommendations of the Government Accountability Office.  I hope the Board continues to evaluate whether they have the tools necessary to regulate the parents of industrial banks."

 

Frank and Gillmor are concerned about ILCs blurring the line between banking and commerce.  Earlier this month, Gillmor and Frank introduced bipartisan legislation, H.R. 5746, to change the nation's banking laws that allow retailers and other commercial firms to own industrial loan companies (ILCs).  The legislation is an outgrowth of Frank/Gillmor provisions which passed the House both last year and in 2004 to prohibit commercially-owned ILCs from gaining additional powers, including opening branches nationwide.

 

Click here for more information on the ILC issue.

 

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The Committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund. The Committee also ensures enforcement of housing and consumer protection laws such as the U.S. Housing Act, the Truth In Lending Act, the Housing and Community Development Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws.