Bank, Credit Union and Consumer Groups Support Committee Vote to Close the Industrial Loan Company Loophole
Washington, D.C. – The U.S. House Committee on Financial Services convened today to mark up a series of proposed laws, including a bill to close the industrial loan company (ILC) loophole. The ILC loophole allows Big Tech and other nonbank companies to offer financial products and services without complying with the safeguards and oversights required of bank holding companies. The “Close the ILC Loophole Act” (H.R. 5912) now heads to the floor for consideration by the entire legislative body.
Americans for Financial Reform, Bank Policy Institute, Center for Responsible Lending, Consumer Federation of America, Credit Union National Association, Independent Community Bankers of America, Mid-Size Bank Coalition of America, National Association of Federally-Insured Credit Unions, National Community Reinvestment Coalition, National Consumer Law Center and U.S. PIRG previously submitted a joint letter of support to the Committee in advance of the vote, and issued the following statement in response to its passage:
With today’s vote, the Committee is one step closer to strengthening the financial system by closing the ILC loophole, and we call on Congress to take up this legislation without delay. The current version of the legislation helps preserve the longstanding separation between banking and commerce and restricts Big Tech companies from circumventing existing rules by using a loophole to enter the banking system. This effort reflects the extraordinary bipartisan work by Representatives Jesús “Chuy” García and Lance Gooden to collaborate with stakeholders to reach a solution, and it serves as an acknowledgment that there is no justifiable reason for two similar institutions offering indistinguishable products or services to be treated differently under the law.
The legislation would help eliminate legal disparities between bank holding companies and ILC parent companies by imposing consistent regulatory and supervisory expectations.
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Contact: Rachel Gittleman, rgittleman@consumerfed.org
