House Bills Moving To Bar Retailers From Banking Biz

The House of Representatives expects to introduce two pieces of legislation that will keep large retailers such as Wal-Mart and Home Depot out of the banking business.

The House of Representatives expects to introduce two pieces of legislation that will keep large retailers such as Wal-Mart and Home Depot out of the banking business. The first bill, sponsored by Reps. Barney Frank (D-Mass.) and Paul Gilmore (R-Ohio), would bar from owning industrial loan companies any company that generates less than 85% of its revenue from financial services. The bill, according to Reuters, may also prohibit a company from establishing an ILC after June 1, 2006. A second bill, to be introduced by Rep. Jim Leach (R-Iowa), would put ILC holding companies under the control of the Federal Reserve. Even if the bills pass in the House, observers say it will have a tough time in the Senate, where Sen. Robert Bennett (R-Utah), the second-ranking Republican on the Senate Banking Committee, supports ILCs, and comes from a state that that is home to about 40 of them.