WASHINGTON - Despite questions about whether the Federal Deposit Insurance Corp. compromised its independence last week by deferring to Congress on who should own industrial loan companies, former regulators and other observers agree the agency had little choice.

Though the FDIC had the authority to approve applications by Wal-Mart Stores Inc. and Home Depot Inc. to own ILCs in Utah, congressional interest in enacting legislation to ban commercial ownership of such companies made moving forward dangerous, observers said.

Lawmakers have warned they would undo any such decision by the FDIC, and most observers said the agency's board recognized that resolving the policy debate was best left to Capitol Hill.

"I would have preferred if they just went ahead and gave people licenses in accordance with the law, and if the Congress wants to act to change the law, they can do it," said L. William Seidman, the FDIC's chairman from 1985 to 1991, who sits on the boards of two ILCs. "But that's the kind of courageous statement you make when you're not sitting in the hot seat."

If he were in FDIC Chairman Sheila Bair's position, "I probably would have supported just what she did," he said. "It's a kind of compromise you make when you're in politics."

Last week the FDIC voted to give lawmakers more than they asked for, agreeing to extend a six-month moratorium put in place in July until Jan. 31, 2008. More than 100 House lawmakers had urged the agency to extend the moratorium for six months. The agency exempted any company that was financial in nature from the ban and urged Congress to settle questions over ILC ownership once and for all.

In an interview Friday, Ms. Bair said that the agency was not trying to please members of Congress by imposing a further delay, and that she honestly felt the issue would be best handled by lawmakers.

"This has nothing to do with the independence of the agency," she said. "Anybody who knows me and knows the people on my board would know that we do what we think is right. And in this case, we think that there are significant public policy issues associated with commercial ownership of ILCs that Congress really should have some time to think about and address."

If the board had approved the Wal-Mart and Home Depot applications despite objections from House Financial Services Committee Chairman Barney Frank and others, the agency might have been accused of giving in to lawmakers on the other side of the issue, Ms. Bair said.

Sen. Bob Bennett, whose home state is the flash point of the controversy, has said ILC ownership should not be restricted. Last week the Utah Republican said that he was disappointed with the agency's decision, which he called severe. He also wondered if companies such as Wal-Mart and Home Depot might sue.

Ms. Bair said, "You could argue it both ways; Congress is far from monolithic on this issue. That really is not what we were responding to. We were responding to what we feel is a very profound need for Congress to have some time to look at this public policy and make a decision."

Former regulators said questions about independence also can be taken too far.

"An independent agency is only going to be independent if it doesn't go beyond acceptable bounds," said William Isaac, the FDIC's chairman from 1981 to 1985, who now runs Secura Group LLC, a consulting firm that has done work for ILCs. "I was probably as independent an FDIC chairman as that agency has ever seen, but I was not unmindful of the fact that ultimately my agency is a creature of Congress, and if Congress wants to do away with my agency," it can do so.

Mr. Seidman, now a commentator for CNBC, agreed that the FDIC's independence comes from a congressional mandate.

"There's no doubt that" the FDIC's decision is "an impingement on their independence, but don't forget that their independence is a result of a federal law passed by the Congress," he said. The FDIC is "independent, but only because Congress says so."

Analysts also drew contrasts between independence on policy matters and regulation.

"Where independence becomes critical is not on these policy issues, but rather on supervisory determinations," said Karen Shaw Petrou, managing partner with Federal Financial Analytics Inc.

V. Gerard Comizio, a financial services lawyer at Thacher Proffitt & Wood LLP, said ignoring Congress could have proved a mistake for the FDIC. Approving the commercial applications could have been "viewed as usurping a very major public policy issue that has ramifications for the U.S. economy: who is allowed into banking."

"Given the major policy issues on nonfinancial entities acquiring banking charters at this point in history, the FDIC is definitely sending a strong message that for the time being they're not willing to go it alone without the Congress continuing its consideration of the issue," he said.

Even if Ms. Bair had wanted to push ahead, the vote probably would have gone against Wal-Mart and Home Depot. Industry representatives say they believe FDIC board members such as Office of Thrift Supervision Director John Reich, FDIC Vice Chairman Martin Gruenberg, and Tom Curry, an independent FDIC board member, would oppose applications by commercial companies.

Only one board member - Comptroller of the Currency John Dugan - has signaled he supports commercial ownership. Last week Mr. Dugan said that the FDIC should not vote against an applicant just because it is a commercial company.

Ms. Bair has not revealed her position, but many industry representatives believe she agrees with Mr. Dugan.

But not everyone praised the agency's decision. After the vote Americans for Banking Competition - a group whose members includes commercially owned ILCs - said the FDIC lacks "statutory authority to impose a moratorium."

William Nixon, whose lobbying firm, Policy Impact Communications Inc., runs the ILC group, said in an interview Tuesday that he would not comment on questions about the FDIC's independence.

However, "these lawmakers, who are trying to chip away at this industry, have asked for this extension, and they got it," Mr. Nixon said.

"We would question the FDIC's regulatory authority to do that, and we have serious concerns about the impact that this extension will have on the ILC industry at large," he said.

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Corrected February 20, 2007 at 1:07PM: An earlier version of this article misnamed a financial services lawyer and misspelled his firm. V. Gerard Comizio is a partner at Thacher Proffitt & Wood LLP.