WASHINGTON - (08/02/05) -- As lawmakers work to resolve a hostof new issues in the regulatory relief bill, one matter hasreturned they thought was resolved last year--the dispute overindustrial loan companies, so-called back-door banks. Though lastyear's Reg Relief bill was held up over efforts to limit the growthof ILCs, the recent applications by Wal-Mart Stores, the nation'sbiggest retailer, and student loan giant Sallie Mae for ILCcharters, is expected to rekindle the controversy. "This is goingto be an issue, again," one banking lobbyist told The Credit UnionJournal. Lawmakers have been trying to keep the lid on ILCs, whichhave allowed a variety of both financial and non-financialcompanies to enter the banking business, allowing them to dispenseloans and accept deposits with federal deposit insurance coverage.Utah, which has the most liberal ILC powers, has granted chartersto automakers Ford, GM, Volvo and Volkswagon, as well as retailerTarget, insurer USAA, office machine maker Pitney Bowes, andfinancial service companies Merrill Lynch, Goldman Sachs, UBS,American Express, CitiCorp, and CIT. Both Wal-Mart and Sallie Maehave applied for an ILC in Utah.
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The Jackson, Mississippi, company will use proceeds from the sale of its Fisher Brown Bottrell Insurance unit to restructure its investment portfolio, moving $1.6 billion of low-yield securities off the balance sheet.
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The store-branded card issuer is raising annual percentage rates and adding fees for paper statements to compensate for lost revenue. The Consumer Financial Protection Bureau's new regulation is scheduled to take effect on May 14.
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At the banks' annual meetings, shareholders at both companies struck down proposals that would have split the board chair and CEO roles. Two other proposals also failed to win shareholder support, one concerning energy financing and another on pay gap analysis.
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Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
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The ABA is testing an information-exchange network to allow banks to share their fraud data with each other. Companies including Baselayer are also building solutions.
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Republicans on the House and Senate Small Business committees are accusing the SBA of being irresponsible in granting Funding Circle permission to participate in its flagship loan-guarantee program.
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