FDIC Will Not Extend ILC Moratorium
Help fighting industrial loan companies (ILCs) may come from an unlikely source—a Democratic presidential candidate.
Senate Banking Committee Chairman Chris Dodd (D-CT) has presented a discussion-draft bill virtually banning all commercial firms from owning ILCs and freezing activities of current commercially-owned ILCs. Committee chairmen occasionally offer discussion-drafts to select senators asking their early opinions on proposed legislation. Depending on reaction, the bill may be sent to the Senate floor or immediately sent to mark-up in a committee. If passed as is, this bill would be much tougher than the U.S. House legislation passed in May.
The timing is fortunate because the FDIC moratorium on ILCs ends January 31, 2008. FDIC Chairman Sheila Bair announced last week she would not extend the moratorium, saying in a news release, “We’ve extended it for 18 months already, and I think if we go much longer, we expose ourselves to litigation risk.”
Large retailers, including Wal-Mart, have recently tried to apply as ILCs to get a foot in the door of banking. Congress and bank trade associations, including the Iowa Bankers Association (IBA), have long and ardently opposed the mixing of banking and commerce. The concern focuses on regulatory oversight, objectivity in credit decisions and the potential overwhelming economic power of a large commercial business owning a bank.
Iowa bankers have voiced their support of House and Senate legislation (H.R. 698, S. 1356) calling for the close of the ILC loophole by creating a general rule that commercial firms – defined as those deriving at least 15 percent of their consolidated revenues from non-financial activities – may not charter or acquire an ILC after the effective date of Jan. 29, 2007, while grandfathering in varying degrees those commercial firms that currently own ILCs.
Under Dodd’s bill, Home Depot’s application for an ILC would not be approved. Wal-Mart, which applied in July 2005, could not reapply.
IBA Management Conference Features Session on ILCs
Industrial loan companies will be the featured topic at the main session of the 2008 IBA Management Conference, to be held February 6-7 in Des Moines. The session will feature speaker Ron Galloway who is the producer/director of the nationally recognized film “Why Wal-Mart Works & Why That Makes Some People C-r-a-z-y.” Galloway is also the author of the recently released book “Wal-o-nomics.”
Assets are the name of the game in financial services, and banks are under increased pressure as financial service firms, “non-bank” banks, and now retailers are leveraging their existing distribution “footprints” to grab more of the pie. Find out how banks can compete with the overwhelming distribution and resources of these emerging threats in this presentation.
For more information about the 2008 Management Conference go online to www.iowabankers.com or contact the IBA’s Ann Winkel at 800.532.1423 or email awinkel@iowabankers.com.
IBIS Announces New Toll Free Number 1-800-775-8858
To better serve bankers, Iowa Bankers Insurance and Services has added another toll free number specifically for IBIS agents. Please use this number if you are calling regarding products for your Depositors’ Life, Disability or Health Insurance or Annuities.
Please also use this number if you are calling regarding Property and Casualty products for your bank or your agency.
Attempted Check Fraud Doubles According to ABA Survey
Attempted check fraud at the nation’s banks has more than doubled in the past three years, reaching an estimated $12.2 billion in 2006, according to the latest American Bankers Association (ABA) Deposit Account Fraud Survey. Specific numbers for attempts at check fraud in Iowa are not available.
“Iowa bankers need to continue to be diligent,” said Assistant Iowa Attorney General and Iowa Division of Banking legal counsel, Shauna Shields.
“Attempted check fraud comes at bankers in many ways--fake lottery scams, counterfeit checks, kiting, forged signatures, among others. Bankers stop fraud by having solid systems in place to stop this crime,” she said.
While attempted check fraud continued to rise across the country, the increase in actual dollars lost was less dramatic -- $969 million in 2006 compared to $677 million in 2003, the last year of ABA’s survey. Banks’ check fraud prevention systems are credited with keeping actual losses significantly lower than the attempted fraud numbers.
Counterfeit checks, stemming from crimes such as check, wire and lottery scams, are now the fastest growing cause of actual dollars lost. The average loss per case increased from $1,098 in 2003 to $1,727 in 2006.
IBA Releases a New Financial Literacy Statement Stuffer
Help your customers learn more about current financial topics with statement stuffers from the Iowa Bankers Association. Stuffers can be personalized with bank information to send to your customers.
Recently, the IBA has released the latest in the series, “Keep Your Financial Information Private.” This stuffer gives your customers more information about keeping personal information secure as well as mailing and telemarketing lists and credit reporting agencies.
An order form can be found online at www.iowabankers.com. Contact the IBA’s Dia Gross for additional information at 800.532.1423 or email dgross@iowabankers.com. Visit www.mysmartfinances.com for more consumer tips and information.
|
