Community Banker Alert

Please see the information below from ICBA on an important announcement by the FDIC imposing a moratorium on ILC applications. This is an important victory. Rest assured PACB will continue making this a top priority. Besides opposing individual applications like Wal-Mart and Home Depot, we are lobbying members of the Pennsylvania Delegation to cosponsor the Gillmor/Frank legislation that would effectively address the explosion of ILC applications. Stay tuned!

Today the FDIC Board of Directors approved a six-month moratorium on applications for deposit insurance by Industrial Loan Companies (ILCs). The board also placed the moratorium on notices of change in bank control for existing ILCs. Further, the FDIC will not make any final decisions on the 14 pending ILC applications-including the Wal-Mart and Home Depot applications-or accept any future applications for deposit insurance or notices of change in control for ILCs during this period.

The FDIC said the moratorium is needed so it can consider developments in the ILC industry, determine if any emerging safety and soundness or policy issues exist involving ILCs, and evaluate whether statutory, regulatory or policy changes are needed to protect the deposit insurance fund.

This action is great news for the community banking industry. ICBA and community bankers have worked long and hard to ensure that the voice of community banks is heard on this issue.

ICBA commends the FDIC for recognizing that the ILC applications are not routine applications but will have a far reaching impact on the fundamental structure of our financial and economic system and on local communities and small business. That is why 150 members of Congress have publicly expressed their concerns to the FDIC, including more than 100 who called for an ILC moratorium. Congress has before it ILC reform legislation and we urge Congress to consider it expeditiously.

Here is a link to the FDIC announcement: http://www.fdic.gov/news/news/press/2006/pr06073.html