Six Month Block On All New Industrial Loan Companies
WASHINGTON -- Prompted by the growing controversy over the entry of non-banks into the financial services market, the FDIC instituted a six-month moratorium on all new Industrial Loan Company charters. The FDIC ban was enacted by the growing criticism in Congress and the banking industry over an application by retail giant Wal-Mart Stores to enter the banking business by acquiring an ILC charter. Though ILCs are state chartered--Wal-Mart has a Utah charter--they all require federal deposit insurance through the FDIC. The ban will not only affect the Wal-Mart bid, but similar applications submitted by Home Depot, Blue Cross/Blue Shield, Berkshire Hathaway, DaimlerChrysler and the several others. Legislation proposed by Congress would permanently bar non-financial companies like those from operating ILCs.