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Washington, DC - Congressmen Paul Gillmor (R-OH), the Ranking Member of the Financial Institutions Subcommittee and House Financial Services Committee Chairman Barney Frank (D-MA), the sponsors of the Industrial Bank Holding Company Act of 2007, made the following statements on today's decision by the Federal Deposit Insurance Corporation (FDIC) to set a one year moratorium on the chartering or acquisition of commercially-owned Industrial Loan Companies (ILC):
"I applaud the decision by the FDIC Board to extend the moratorium on commercial firms. Over the past several years, Congress has shown a keen interest in this policy area and I hope the Committee will soon begin consideration of H.R. 698. I remain optimistic that we can get the Gillmor-Frank ILC reform bill to the President's desk this year. It is vital that Congress acts to close this loophole which is creating a parallel banking system and eating away at the separation between banking and commerce," said Congressman Gillmor.
"I appreciate the actions today by the FDIC. The commercial moratorium is especially important, and I believe the process for putting conditions on future ILCs owned by financial companies is a good step. The extension of the moratorium also gives us the ability to legislate and maintain the historical and necessary separation between banking and commerce," added Congressman Frank.
Congressional Action to Date:
- In both the 108th and 109th Congresses, the House of Representatives overwhelmingly passed Gillmor/Frank sponsored legislation to address the ILC issue.
- On June 8, 2006, Gillmor and Frank led 98 Members of Congress in writing to the FDIC asking for a moratorium on approval orders for commercially-owned ILCs until Congress considers the matter.
- On July 28, 2006, the FDIC announced a 6-month moratorium on the processing of applications for deposit insurance from ILCs.
- In a December 7, 2006 letter, Gillmor and Frank led 107 Members in a request for at least an additional 6-month moratorium on ILC applications for deposit insurance by commercial firms.
- On January 29, 2007, Reps. Gillmor and Frank introduced the Industrial Bank Holding Company Act of 2007, H.R. 698, to restore the historic separation between banking and commerce, prevent branch banking by some commercially-owned ILCs, and bolster the examination and enforcement authorities of the FDIC as a holding company regulator.
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