Fed Chairman Throws ColdWater on Creating Wal-Mart Bank
Washington, D.C. - Federal Reserve Chairman Ben S. Bernanke on Tuesday issued the following written response to a question from Congressman Brad Sherman about a loophole that lets commercial firms buy industrial banks.
œ¦The Board has encouraged Congress to review the exemption in current law that allows a commercial bank to acquire an FDIC-insured industrial bank (ILC) chartered in certain states without regard to the limits Congress has established to maintain the separation of banking and commerce, he said.
œContinued exploitation of the ILC exception threatens to remove this important policy decision from the hands of Congress, Bernanke added.
Sherman said, œChairman Bernankes statement clearly urges Congress to prevent regulators from mixing banking and commerce. He clearly urges us to close the ILC loophole which Wal-Mart is trying to exploit to get into the banking business.
Sherman is a member of the House Financial Services Committee. He asked Bernanke about Wal-Mart at a Feb. 15 hearing.