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Bill Would Limit Control of ‘Industrial’ Lenders

From Reuters

Commercial firms such as Wal-Mart Stores Inc. would be blocked from controlling so-called industrial banks under a bill introduced as congressional auditors asked whether such banks had enough oversight.

Industrial banks make loans to consumers and small businesses and accept deposits but don’t offer checking accounts.

A Government Accountability Office report says Congress should consider boosting the regulatory oversight of industrial banks, said Rep. Jim Leach (R-Iowa), who released excerpts from an advance copy.

Wal-Mart has applied to open a bank in Utah, one of just five states where commercial firms may own such companies.

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Under Leach’s bill, any firm controlling an industrial bank would become subject to the Bank Holding Company Act.


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