Chuy hails ‘consumer protection’ legislation

From staff reports

Legislation designed to prevent large technology companies, retail firms and payday lenders from owning an industrial loan company (ILC) charter and operating a bank without any of the oversight, safeguards and limitations that apply to such institutions, has passed the House Financial Services Committee, said U.S. Rep. Jesús “Chuy” García (D-4^th), a sponsor of the measure.

U.S. Rep. Jesús “Chuy” García (D-4th)

The Close the ILC Loophole Act was also sponsored by U.S. Rep. Lance Gooden, a Texas Republican.

“My constituents know that working class people like them pay the price when our financial system is unstable, and my bipartisan Close the ILC Loophole Act is an urgently needed measure that protects consumers, encourages competition, and promotes financial stability and fairness,” García said. “This bill will finally close the ILC loophole and create a level regulatory playing field for these banks. I urge my colleagues to pass it out of the House and into law as soon as possible.”

Gooden said, “Congress must prevent Big Tech companies from exploiting loopholes in our financial system to gather Americans’ personal financial information and crush smaller financial institutions. The ILC loophole allows these companies to avoid traditional banking regulations, providing them with a significant competitive advantage, and I am proud of the Financial Services Committee members who worked with me to close that loophole and ensure community banks are protected.”

If made a law, the Close the ILC Loophole Act will end the issuance of new ILCs, establish oversight of the parent companies of existing ILCs and provide a process for pending ILC applications.

The legislation is supported by a coalition of regulated banks, credit unions and consumer protection organizations, including 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 Federally-Insured Credit Unions, National Consumer Law Center, National Community Reinvestment Coalition and U.S. Public Interest Research Group.