The U.S. House overwhelmingly passed the “Industrial Bank Holding Company Act of 2007.” The bill restores the historic separation between banking and commerce, prevents branch banking by some commercially-owned ILCs, and bolsters the supervisory authorities of the FDIC as a holding company regulator. “H.R. 698,” was co-sponsored by Paul Gillmor (R-OH), Barney Frank (D-MA), and Jim Marshall (D-GA). The bill was introduced on January 29th, the subject of a hearing on April 25th, and was overwhelmingly passed by the Financial Services Committee on May 2nd. Frank, who is Chairman of the House Committee on Financial Services, said he hopes to work with the Senate to forge a compromise bill that the President can sign.
TX-based debt buyer and collector, FirstCity Financial, reported second quarter earnings of $1.3 million compared to $2.7 million one-year ago. The Company purchased $25.2 million in portfolio assets during the second quarter and invested equity in these portfolios of $19 million. These purchases consisted of six portfolios — five in the USA and one in Europe. The Company is currently evaluating 35 different transactions representing over $4 billion in face value of assets. For complete details on FirstCity Financial’s latest performance, visit CardData ([www.carddata.com])
Wal-Mart’s grand plan to operate an Industrial Bank Company in Utah to lower its credit card, debit card and electronic check processing costs drew a cynical response by bankers yesterday at a FDIC hearing. The American Bankers Association says Wal-Mart’s appetite to engage in full-servicing banking represents a threat to the nation’s policy of seperating banking from non-financial commerce. Wal-Mart says its only goal is to save money on transaction costs and will continue to support and expand the 1,150 independent bank branches already in its stores. However, bankers joined together to question Wal-Mart’s credibility, citing its many sins particularly with labor issues. Bankers say Wal-Mart cannot be trusted and that the bank branches in its stores operate under very loose contracts. Wal-Mart receives more than 150 million credit, debit and electronic check payments per month. The giant retailer spearheaded the debit card lawsuit against VISA and MasterCard which led to a record $3 billion anti-trust settlement in 2003.