Hurdles Remain for ILC Bill
Adler, Joe, American Banker
WASHINGTON -- The House was expected to easily pass a bill late Monday that would bar commercial firms from owning industrial loan companies.
But the bill, which also would put existing ILC owners under consolidated federal supervision, faces an uncertain future in the Senate.
Though there is support on the Senate Banking Committee for an identical ILC bill unveiled May 10 by Sens. Sherrod Brown, D-Mo., Tim Johnson, D-S.D., and Wayne Allard, R-Colo., Chairman Chris Dodd, D-Conn., has not indicated when the panel would take up that bill.
Furthermore, under Senate rules a lone opponent can do a lot to stop legislation. Sen. Bob Bennett, R-Utah, the committee's No. 2 Republican and the top advocate of his state's ILC sector, still carries substantial weight despite being in the minority party, observers said.
"One senator is always really powerful in the Senate," said Karen Shaw Petrou, the managing partner of Federal Financial Analytics Inc.
The clock is ticking for House Financial Services Chairman Barney Frank, who co-sponsored the House bill with Ohio Republican Paul Gillmor, to compromise with supporters of less-restrictive measures. The Federal Deposit Insurance Corp. has placed a moratorium on approving any ILC applications from commercial firms until Jan. 31, 2008, but agency officials have said they are unlikely to approve a further delay.
"It is my hope that the Senate can find a consensus approach ... to remove the cloud of uncertainty over the ILC charter and allow the ILC industry to continue as a strong, safe and sound component of the banking sector," FDIC Chairman Sheila Bair said in a statement e-mailed Monday to American Banker.
Under the Frank-Gillmor bill, firms that generate 15% or more of their revenue from commercial activities would be locked out of the ILC charter. …