WASHINGTON — Credit union organizations in Washington are watching but not getting involved in legislation making its way through Congress to keep companies like Wal-Mart from entering banking.
The Industrial Bank Holding Company Act (H.R. 698), introduced by Congressman Paul Gillmor (R-Ohio) and Barney Frank (D-Mass.), would place a threshold on companies wishing to own industrial loan companies of at least 85% of revenues from financial business. The House Financial Services Committee held a fairly brief markup on the ILC bill May 2.
While not passing such legislation could potentially have a negative impact on credit unions in the way of competition, neither CUNA nor NAFCU have taken an official position on the bill, though NAFCU Director of Legislative Affairs Brad Thaler said, "we share some of the concerns that others have about ILCs."
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Given the 85% benchmark, "credit unions, or CUSOs or CUNA Mutual and all of those that have talked about starting an industrial bank for purposes of processing credit card portfolios, all of those would be eligible," CUNA Vice President of Legislative Affairs Dean Sagar noted.
"As long as it's structured the way it is and it's focusing on financial companies, it doesn't bar credit unions from anything that people have planned or even talked about in the past. It's really not our role to try and bar Wal-Mart from interstate banking if that's what it wants to do," Sagar said. "I know [Wal-Mart entering banking] could hurt credit unions but there's enough opposition out there…we don't have a big dog in that fight."
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