Washington, D.C.—The United Food and Commercial Workers (UFCW) International Union is proud to announce its support for the bi-partisan legislation bill being introduced in the Senate today which will strengthen the regulation of industrial loan companies (ILCs). Introduced by Senators Sherrod Brown (D-OH) and Wayne Allard (R-CO), this important legislation is a real reform to address the huge growth of ILCs and the threat they pose to the safety and soundness of the U.S. financial system when these institutions are controlled by commercial entities.
|Michael J. Wilson, UFCW International Vice President and Director of the Legislative and Political Action Department, left, with Sen. Wayne Allard (R-CO), William A. Loving, CEO of Pendelton Community Bank, and Sen. Sherrod Brown (D-OH)|
ILCs, which exist because of a loophole in the Bank Holding Act, are regulated differently from banks. A growing number of ILCs are owned by commercial entities, which unlike banks, are not subject to consolidated oversight by the Federal Reserve Board. This represents a perilous break from our nation’s long-standing practice of separating banking and commerce. The Brown/Allard bill will strengthen the regulation of ILCs and protect the foundation of the American banking process by placing crucial limitation on certain existing ILCs and prohibiting the creation of new commercially-owned banks.
“We need to close the loophole to end the threat it presents to the security of the U.S. financial system,” said UFCW International Vice President and Director of the UFCW Legislative and Political Action Department Michael J. Wilson. “Federal legislation is the only appropriate response for the construction of a sound banking policy. The ILC loophole must be closed in order to strengthen consumer protections and prevent companies like Wal-Mart from entering the banking industry.”
The UFCW also strongly supports the House companion bill, H.R. 698, the Industrial Bank Holding Company Act of 2007, which recently was approved by the House Financial Services Committee.
The UFCW is a founding member of the Sound Banking Coalition which has fought to protect the financial security of working people. The Sound Banking Coalition is made up of the Independent Community Bankers of America (ICBA), the National Grocers Association (NGA), the National Association of Convenience Stores (NACS), and the UFCW.