Bills aim to keep big retailers out of banking (WAL-MART Home Depot )

[Omaha Steve]

This is great news. But I know my Congressman Lee Terry (R-Ne) will vote against it.

fULL STORY: http://money.excite.com/ht/nw/bus/20060709/hle_bus-n09322239.html

Bills aim to keep big retailers out of banking

Sunday July 9, 11:47 AM EDT

By John Poirier

WASHINGTON (Reuters) - U.S. House of Representatives lawmakers this week will propose restricting ownership of banks by commercial companies in a legislative push to derail the efforts of retailing giants to move into financial services.

The aim of the new bill is to deliver a loud, clear message to the banking regulator now reviewing applications by Wal-Mart Stores Inc. (WMT) and Home Depot Inc. (HD) to buy or form industrial loan companies (ILCs), according to financial lobbyists.

"Expressions of concern by the Congress are frequently useful as regulatory agencies consider whether they're going to approve," said Floyd Stoner, executive director of the American Bankers Association trade group.

Those concerns will be expressed in proposed legislation next week and at a Wednesday hearing planned by a House of Representatives Financial Services subcommittee.

ILCs have been around since the early 1990s and are chartered by only a few states, most notably Utah, and regulated by the Federal Deposit Insurance Corp. (FDIC).

Wal-Mart wants to open an ILC to process electronic payments from its stores involving credit and debit card transactions, potentially saving it millions of dollars each year.

More at link:



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[Blackhatjack]

1. So why not a 'front bank' owned by the Chinese??

I read recently that Walmart obtains almost all of its manufactured merchandise for resale from 800 manufacturing plants in China, and only 2 in the US. Walmart is China's biggest export partner to the United States, and the world.

China's huge trade surplus with the US would be even more profitable if Walmart were allowed to process their own debit and credit card transactions. All those billions of dollars China is holding would inevitably end up benefitting from a Walmart bank.

So who believes Walmart is a United States company any more, except in name only?

Just another step in the direction of corporate power accumulation, which will further aid China in exerting even more control over the US economy and government.

[Tellurian]

5. wortha kick..n/t

[cornermouse]

2. Corporations are turning on and cannabalizing each other.

:spray:

[Tellurian]

6. Not really, no need-

They will merge to qualify under the faux guidelines.

[Democrats_win]

3. Main concern: Wal-Mart will use FDIC to screw taxpayers out of Trillions!

[Tellurian]

4. Misleading Headline!!!! This is a Very Bad Thing!!!

from the link provided:

"Home Depot has said its ILC would provide loans for consumers for home improvements."

offering the loan as a Federal loan subsidized by the government..huh?

(their link below)
https://secure29.websitecontrols.com/topconsolidator%2Dcom/leadForm.asp

"U.S. laws historically have sought to separate commerce and banking activities to avoid placing the federal deposit insurance fund -- which currently amounts to $49 billion -- at risk if the bank fails. However, an exception now on the books allows commercial firms to own an ILC."

query:

When was this exception made? And who made it?

"The FDIC has given no indication of when it will act on the applications."

So, there is a lack of concern about bank failure? If the banks should fail, all home mtg loans will be called in-
and if mortgage holders are not able to pay off their mtg balance...homeowners will be homeless in droves.

Dem's Remedy": IS IT ENOUGH? NO WORRIES, THEY SAY:

"We'll be introducing legislation to close the ILC loophole," said Steve Adamske, spokesman for Massachusetts Rep. Barney Frank, the top Democrat on the House committee."

"Lobbyists said they expect a bill from Frank and Paul Gillmor, an Ohio Republican, to prohibit a company with less than 85 percent of revenue generated from financial services from owning and operating an ILC."

"The bill may also bar a commercial company that has not established an ILC by June 1, 2006, from acquiring one."

All of these bills are setting guidelines paving the way for participation by new corps wanting to join. The price must be terribly high for gaining membership. That too will have high premiums.

"A separate House bill planned by Iowa Republican Jim Leach would require the Federal Reserve to regulate an ILC's holding company. That would strip the FDIC of most of its power over ILCs and make them subject to Federal Reserve examinations."

Sounds like a BAD thing to me!!!

"The Fed has decades of experience of doing that," said Steve Verdier, senior vice president of the Independent Community Bankers of America trade group. "They know how to do this. They do it every day."

The Leach bill would give an ILC operating prior to January 1, 2005, a five-year grace period to wind down operations or become part of a bank holding company, experts said. *LOOPHOLE*

However, the House legislation is unlikely to become law because it faces opposition in the Senate.

"Among those who are strong defenders of ILCs is Robert Bennett of Utah, the second-ranking Republican on the Senate Banking Committee. His state is home to nearly 40 ILCs, according to the Utah Department of Financial Institutions.

Bob Bennett, the gambler. Racking up so much debt he became an embarrassment to his own family.

Why in the world would Americans want or need a Congress to summarily hand over personal financial safeguards to ILC's? This on the say so of a reckless senator so deeply entrenched in Ethic's violations, Conflicts of Interest , a bought and paid for corporate lobbyist to satisfy the need for corporate greed at the peril of all Americans?