WASHINGTON – Buried in the ICBA’s testimony on regulatory relief earlier in March was a denunciation of the idea of credit unions purchasing or chartering industrial loan corporations. Two credit unions or credit union groups have applied to buy or charter ILCs to provide CUs another CU-based alternative to sell their card portfolios. In its March 1 testimony on regulatory relief, the ICBA mentioned the issue of ILCs and credit unions briefly, noting, “Both ILCs and credit unions already have unfair regulatory and tax advantages over community banks. Commercial companies may own ILCs and ILC holding companies are not subject to consolidated supervision by the Federal Reserve. “In a particularly strange twist, credit union groups in California and Utah have applied to acquire or establish ILCs. These combinations would allow credit unions to expand their reach beyond any conceivable common bond restriction. Congress should promptly redress these imbalances in the nation’s financial system. In the context of regulatory burden relief legislation, we urge you to – at a minimum – refrain from exacerbating them,” ICBA wrote.

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