This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

WalMart May Still Get Its Bank: Street Whispers

V. Gerard Comizio -- a partner in the corporate department of Paul Hastings, in the firm's Washington office -- says that "WalMart ran into a perfect storm. The biggest banks in the country said that if we have a company instantly one of our biggest competitors, that parent should have to suffer under the same regulator regime as we do, and we should be allowed to engage in non-financial activities."

The community banks were worried, and were being told by the community organizations that oppose WalMart's stores, that WalMart would destroy the community banking system as they have destroyed small-town merchants," Comizio says, adding that "everybody else that hates WalMart crawled out of the woodwork and turned it into a circus."

Companies that own ILCs are not subject to the Bank Holding Company Act, and are not regulated by the Federal Reserve, which does regulate large financial holding companies. According to Comizio, the FDIC is, effectively, "the regulator of the ILC and the parent company, but what they said at the time of the WalMart mess was that they don't try to actively regulate the holding company's non-financial business. They focus on protecting the bank from any abuse by its parent company or its affiliates."

The FDIC's own Advisory Committee on Banking Policy has said that the agency's "supervisory experience with ILCs suggests that ILCs charters pose no greater safety and soundness risk than do other charter types."

After the FDIC put in place a six-month moratorium on new ILC charters in August of 2006, the moratorium was extended for another year, following intense pressure from members of Congress. In its March 2008 Blueprint for a Modernized Financial Regulatory Structure, the U.S. Treasury noted that the Gramm-Leach-Bliley Act of 1999 had already "relaxed" the Glass-Steagall Act's separation of banking and commerce, and also said that "the history of commercial firms affiliating with insured depository institutions has not supported the view of greater risks present in such structures."

The ILC issue was put on hold again when the Dodd-Frank Wall Street Reform and Consumer Protection Act -- signed into law by President Obama on July 21, 2010 -- included a three-year moratorium on new industrial loan company charters.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,083.80 -2.83 -0.02%
S&P 500 1,987.98 +0.97 0.05%
NASDAQ 4,472.1080 -1.5890 -0.04%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs