Senate Banking Committee votes to restrict ILC licenses (Walmart, GM)

[Omaha Steve]

Source: Financial Week

Measure faces uphill battle in full Senate, though

By Nicholas Rummell
February 13, 2008

A bill to restrict ownership of industrial loan corporations by non-financial companies such as Wal-Mart barely passed the Senate Banking Committee today, and likely will face an uphill battle in the full Senate.

The bill, proposed late last year by committee chairman Christopher Dodd (D-Conn.), would allow existing ILCs to continue, but would prohibit new applications from companies that do not derive most of their business from financial services. The bill also would require ILC holding companies to be subject to consolidated supervision by the Securities and Exchange Commission and other regulators.

“We can no longer kick the can down the road,” Mr. Dodd said, noting that a moratorium on new ILC applications expired last month. “It’s sitting out there, and we have to deal with this.” The Federal Deposit Insurance Corp., which had issued the moratorium, would be granted additional examination and supervisory authority over existing ILCs under the bill.

The House overwhelmingly passed a similar, albeit less-restrictive bill last year, but the so-called ILC loophole seems a tougher nut to crack in the Senate. The ranking Republican on the committee, Sen. Richard Shelby (R-Ala.), opposed the bill, noting that he supports closing the ILC loophole but has “serious differences” on how to do it. Mr. Shelby urged the committee to hold additional hearings on ILC ownership before progressing.


Read more: http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080213/REG/20479840/1036

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None of the stories I checked listed a bill number.

[Heywood J]

1. Welcome to Wal-Loan.

Imagine such consumer-friendly and employee-friendly companies like Wal-Mart being able to lend out money, like mortgages and car loans. Especially with their track records on other issues, who wants to guess what they would charge? Who they would lend to? What kind of conditions or collateral they would ask for?

This does not bode well - not too many more steps left until we get back to the company store mentality and the Gilded Age, before anti-trust laws.

[monktonman]

2. Imagine trying to get a loan from Walmart to start a small business? n/t