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WASHINGTON – Opponents of industrial loan corporations, the nonbank entities which can often behave like banks, continue to try and block the chartering of new ILCs. Last week a coalition of 98 House members, roughly two thirds Democratic, sent a letter to the FDIC urging the bank insurer to refrain from insuring any ILCs until after Congress has come to a decision about the firms. Now the opponents are asking other groups to sign on to the same effort, according to CUNA lobbyists. ILCs have drawn controversy because while they often act like banks and have many of the same powers they are not regulated the same way, a lack which consumer advocates and the banking industry have challenged. The ongoing controversy over the ILCs would appear to leave the future of two credit union industry attempts to buy or charter ILCs in doubt. One coalition of credit union interests led by Wescom is attempting to purchase an existing ILC in California while another, led by CUNA Mutual Group, is seeking to charter an ILC in Utah. If the charter and purchase were successful the new credit union-owned entities would seek to offer CUs another credit union-owned alternative purchaser for their credit card portfolios.

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