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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 Wal-Mart to, after 20 months, withdraw its application for an Industrial Loan Companies (ILC) charter:
“For me, the importance of maintaining the separation between banking and commerce has always been bigger than one company. This single exception that exists in our bank laws is not a Wal-Mart or a Home Depot loophole, it is an ILC loophole, and it must be closed. It is critical that we do not create a parallel banking system for commercial firms. Chairman Frank and I have been working on legislative solutions for more than four years and I am optimistic that we can get the Gillmor-Frank measure to the President’s desk shortly,” said Congressman Gillmor.
“I appreciate the constructive step by Wal-Mart not to pursue an ILC charter, but it does not in my judgment, remove the need to legislate in this area,” said Financial Services Committee Chairman Barney Frank.
In January, Congressman Gillmor and Financial Services Committee Chairman Barney Frank introduced legislation to help restore the wall between banking and commerce and stem the expansion of the ILC charter. Their bill, the Industrial Bank Holding Company Act of 2007 (H.R. 698), is an outgrowth of the Gillmor/Frank compromise which passed the House in both the 108th and 109th Congresses. This legislation will be the subject of a hearing on March 22nd, 2007 at 10:00 a.m.
Yesterday, it was revealed in an email from Wal-Mart that the company has been seeking to revise leases with in-store banks. This revision expanded the financial abilities of Wal-Mart from its current leases to include mortgages, home equity loans and lines, consumer loans, debit cards, credit cards, investment and insurance products, and any other financial or other service or product offered by Wal-Mart Stores, Inc.
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