House Approves Ban on Wal-Mart Banks

WASHINGTON – The House overwhelmingly approved a bill Monday to bar commercial firms like Wal-Mart Stores, from owning industrial loan companies, state chartered banks. But the bill is expected to run into major opposition in the Senate, where Bob Bennet, Senator from Utah, home of half the ILCs, has a prominent seat on the banking committee. The bill was introduced in the House to prevent retail giant Wal-Mart from owning a bank–like one competitor, Target Stores–but appears to have lost some of its impetus since Wal-Mart withdrew its ILC application. Still, key members of both parties hope to maintain the traditional barrier between banking and commerce, which has been in effect since the Great Depression. The bill would have no effect on any credit union applications for an ILC because it requires that an ILC applicant conduct at least 85% of its business in financial services. Two separate credit union applications for ILCs were withdrawn last year due to the rising controversy surrounding Wal-Mart.