WASHINGTON, D.C. – Today, U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, along with Senator John Kennedy (R-LA) and additional bipartisan cosponsors, reintroduced the Close the Shadow Banking Loophole Act, a bill to require that industrial loan companies (ILCs) abide by the same rules, supervision, and consumer protections as traditional banks.
“We commend Chairman Brown and Senator Kennedy’s bipartisan effort to close the loophole allowing Industrial Loan Companies to evade oversight. This bill advances the basic principle that all financial entities with similar products ought to be regulated and supervised similarly,” said Mitria Spotser, vice president and director of federal policy at the Center for Responsible Lending (CRL). “The Close the Shadow Banking Loophole Act would help stop ILCs from evading accountability and, in the process, exposing consumers, taxpayers and the market to increased risk.”
In a letter supporting the legislation, several financial services and consumer groups wrote, in part, “The time is now for Congress to close the ILC loophole before it is further exploited by firms seeking to gain the advantages of an FDIC-insured bank charter without the concomitant supervision and regulation that Congress has established for the corporate owners of full-service insured banks. As financial services trades and consumer advocates, we come together to fully support this legislation and look forward to working with the committee to advance this legislation in the future.”
Signatories to the letter 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 Credit Unions, National Community Reinvestment Coalition, National Consumer Law Center (on behalf of its low-income clients), and U.S. PIRG.
The Senate Committee on Banking, Housing, and Urban Affairs produced the following one-pager on the Close the Shadow Banking Loophole Act.
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