Home Depot Inc.’s announcement late May 9 that it plans to acquire a Utah industrial loan company is sure to invigorate efforts on Capitol Hill to eliminate this controversial category of lending institution.
Depending on state law, industrial loan companies, or ILCs, can offer nearly all the services traditional banks can, but their owners face much less scrutiny from federal regulators. Critics of ILCs say the institutions are a danger to the U.S. banking system because, while they are covered by federal deposit insurance like other banking institutions, the reduced oversight could allow them to venture into riskier activities.
