A coalition of leading banks, credit unions and consumer organizations today endorsed legislation to close the industrial loan company loophole. This loophole undermines the separation of banking and commerce by allowing commercial firms and nonbanks to own FDIC-insured banks without being subject to the full set of safeguards required of other insured banks, such as consolidated Federal Reserve oversight. The “Close the Shadow Banking Loophole Act,” introduced by Senators John Kennedy (R-LA) and Kim (D-NJ), would protect consumers and the financial system by requiring all companies engaged in the same banking activities to follow the same rules. In addition to filing a letter of support, the groups stated:
“We support the Close the Shadow Banking Loophole Act and urge swift passage of the bill into law. Companies that act like banks should be regulated like banks. The ILC loophole blurs the line between banking and commerce and undermines Congressional safeguards to the detriment of consumers and the safety of the financial system.”
The groups represented include America’s Credit Unions, Americans for Financial Reform, Bank Policy Institute, Center for Responsible Lending, Consumer Federation of America, Independent Community Bankers of America, Mid-Size Bank Coalition of America, National Consumer Law Center (on behalf of its low-income clients), National Community Reinvestment Coalition and U.S. PIRG.
To access a copy of the letter of support, please click here.
Additional Resources:
- Financial Services and Consumer Groups Support Senate Bill to Close Industrial Loan Company Loophole
- Bank, Credit Union and Consumer Groups Support Closing Industrial Loan Company Loophole Ahead of Committee Markup
- Banks, Credit Unions and Consumer Groups Support H.R. 5912, The Close the ILC Loophole Act
- Closing the Industrial Loan Company Loophole: An Urgent Priority to Prevent Systemic Risk and Consumer Harm
Media Contacts
Paloma Perez Christie
America’s Credit Unions
pperezchristie@americascreditunions.org
Jarice Thompson
Americans for Financial Reform
jarice@ourfinancialsecurity.org
Austin Anton
Bank Policy Institute
austin.anton@bpi.com
Matthew Kravitz
Center for Responsible Lending
matthew.kravitz@responsiblelending.org
Nicholas Rubando
Consumer Federation of America
nrubando@consumerfed.org
Nicole Swann
Independent Community Bankers of America
nicole.swann@icba.org
Eden Forsythe
National Community Reinvestment Coalition
eforsythe@ncrc.org
Stephen Rouzer
National Consumer Law Center (on behalf of its low-income clients)
srouzer@nclc.org
Mike Litt
U.S. PIRG
mlitt@pirg.org
