Lawmakers Seek Ban On NewILCs
WASHINGTON - (06/12/06) In a move that could have direconsequences for two pending credit union projects, a bipartisancoalition of 98 House members urged the FDIC Friday to refrain fromapproving any new Industrial Loan Companies until Congressconsiders the issue. The move could set-back two pending ILC bidsby credit union groups trying to wrest the market for credit cardacquisitions from bank-controlled entities. Those bids, a CUNAMutual-led group that has acquired a Utah ILC, and the purchase byWescom CU of a California ILC, seek to keep credit union cardsportfolios within the credit union movement, as increasing numbersof credit union portfolios are being sold to banks, like U.S.Bancorps Elan Financial unit, Bank of Americas MBNAand First National Bank of Nebraskas InfiCorp. Thelawmakers concerns have increased in recent months asnon-banking giants like Wal-Mart and Home Depot seek to enterbanking by acquiring ILCs. The letter to the FDIC, obtained by TheCredit Union Journal, asks the bank regulator to halt approvals ofdeposit insurance for all new ILCs or acquisitions of existing onesuntil later this year when the House Financial Services Committeeis expected to debate the issue. Both the CUNA Mutual group andWescom CU have applications for deposit insurance pending beforethe FDIC.