Associations oppose Home Depot's purchase of industrial loan company
Wednesday, June 07, 2006
Inman News
In a move that puts banks and real estate on the same side of a debate, the American Bankers Association opposes the Home Depot's application to the Federal Deposit Insurance Corp. to acquire EnerBank USA, an industrial loan corporation, the association said Tuesday in a comment letter.
In early May, the Atlanta-based retailer announced it was buying EnerBank USA, which has a Utah-based industrial loan charter that allows it to make loans and offer other banking services.
"As with the application of Wal-Mart Stores Inc. to obtain deposit insurance for its proposed ILC, the Home Depot [application] jeopardizes the continued separation between banking and non-financial commerce that has served our banking industry and our nation so well," ABA said.
ABA noted that current bills in Congress continue to reflect a heightened interest in preserving the separation between banking and non-financial commerce by restricting the authority of ILCs that are controlled by commercial firms.
Moreover, House banking committee members have signaled their intent to introduce legislation that will address the ILC issue in a comprehensive manner, and they soon will ask FDIC to postpone decisions on all ILC applications until Congress can act.
"The ABA has consistently supported these efforts," ABA wrote. "Last year, our board of directors unanimously reaffirmed ABA's position that non-financial commercial firms should not acquire new or existing banks, including ILCs."
The National Association of Realtors has urged the FDIC to block Home Depot from purchasing EnerBank USA, saying the move could create potential conflicts of interest, pose risk to the nation's financial system and discourage competition in financial services.
"NAR and its 1.3 million members are extremely concerned about the inevitable conflicts of interest, the harm to the competitive landscape, and the risks to the U.S. financial system. Banks must be honest brokers of financial services and not be swayed into making credit and other business decisions based on their affiliation with commercial firms or projects," NAR President Thomas Stevens said Tuesday.
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Copyright 2006 Inman News
