July 11, 2006

The Honorable Paul Gillmor
U.S. House of Representatives
1203 Longworth HOB
Washington, DC 20515

The Honorable Barney Frank
U.S. House of Representatives
2252 Rayburn HOB
Washington, DC 20515

Dear Congressmen:

I am writing to express ACB’s support for “The Industrial Bank Holding Company Act of 2006.” This legislation will establish statutory requirements for certain state banking charters concerning the mixing of banking and commerce. These requirements are a logical extension of principles established by Congress under the Gramm-Leach-Bliley Act (GLBA) in 1999, will bring parity to the banking system and reduce potential risks to our nation’s financial system.

When Congress passed GLBA it did not address the issue of allowing industrial loan companies (ILCs) as a form of charter by which commercial entities could enter the banking business. Your legislation, “The Industrial Bank Holding Company Act,” solves this problem by creating a common sense system of regulation for ILCs by creating an ILC holding company structure that provides the FDIC with the authority to examine the entire ILC holding company for safety and soundness.

In addition, your legislation treats those ILCs that have already been lawfully created to retain their current structure, with reasonable limitations for the newer ILCs created in the past few years, but prohibits future ownership of ILCs by commercial firms. This is a fair method to ensure the safety and soundness of our nation’s financial system without punishing those ILCs that were lawfully established, and is substantially similar to procedures implemented under GLBA.

Thank you for your leadership on this bill. ACB applauds your hard work in drafting the “Industrial Bank Holding Company Act.” We look forward to working with you to bring about its swift consideration.

Sincerely

Robert R. Davis
Executive Vice President and
Managing Director, Government Relations

cc: The Honorable Michael Oxley