A bill introduced yesterday in Congress that would close a loophole in the separation of banking and commerce has the support of a banking industry trade group. Reps. Paul Gillmor, D-Ohio, and Barney Frank, R-Ohio, on Monday introduced legislation to restrict commercial ownership of banks, an issue that's been debated since retailers Wal-Mart and Home Depot applied for charters to operate industrial banks. The bill would create a general rule that commercial firms -- defined as those deriving at least 15 percent of their consolidated revenues from non-financial activities -- may not own an industrial loan company. Also, companies that currently own an industrial loan company (as of Oct. 1, 2003) may continue to own the lending company but may not sell it to another commercial entity; those that acquired their industrial loan companies after Oct. 1, 2003, also may continue to own it and not sell to another commercial entity and are subject to branching and activity restrictions. Indus...
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