Congressman Barney Frank and Congressman Paul Gillmor React to the FDIC Letter on Wal-Mart's Application for Deposit Insurance

January 20, 2006

Congressman Barney Frank, the Ranking Democratic Member of the House Financial Services Committee and Congressman Paul E. Gillmor (R-OH), also a senior member of the House Financial Services Committee, today made the following statements in response to a letter from the FDIC regarding Wal-Mart's application for deposit insurance. The FDIC letter is in response to a December 16 letter by Frank, Gillmor and 23 other bipartisan members of Congress asking the FDIC to hold public hearings on the Wal-Mart application and to hold off action until the board has a full complement of members.

"I welcome the FDIC's approach to a major decision impacting federal banking policy. To allow a large wholly commercial entity such as Wal-Mart to enter the banking business raises serious issues, and the FDIC should not consider this request without significant public input and consideration by the full board," said Congressman Frank.

"The announcement by the FDIC to delay a decision on Wal-Mart's application until a full board has been convened and to allow for public hearings demonstrates an awareness of the significance of Wal-Mart's request. Maintaining the historic separation between banking and commerce is essential to our financial safety nets and the FDIC's response to bipartisan Congressional interest is consistent with their mission," Gillmor said. "I look forward to continuing to work with Ranking Member Barney Frank and others on the Financial Services Committee to get legislation to the President that will address the policy concerns inherent in commercially-owned ILCs," Gillmor continued.

The FDIC Letter is attached to this email. Below is the December 16 bipartisan letter:

December 16, 2005

Dear Chairman Gruenberg:

As concerned members of the House Committee on Financial Services, we urge the Federal Deposit Insurance Corporation to defer any decision on the application for federal deposit insurance filed by Wal-Mart Bank until the Board has its full complement of directors. This application is clearly of sufficient importance to require that it be made by the members of the FDIC Board itself and only by a full Board without vacancies. We ask for your commitment that the decision will be deferred at least until the Board is once again at full strength.

On September 23, 2005, Ranking Member Frank and Congressman Gillmor wrote to then-Chairman Powell urging the FDIC to hold public hearings on the application, and we renew that request today. While FDIC regulations in 12 CFR 303.10(c), appear to leave the determination of whether to hold public hearings to the discretion of the regional director, we urge that you exercise your authority as Chairman to require that public hearings be held on the Wal-Mart Bank application. As you know, this application has generated historic levels of interest, with the FDIC receiving more than 1000 written comments. We believe that the extensive number of comments received by the FDIC supports the need for public hearings, rather than be used as a reason why public hearings should not be held. The FDIC regulation states one of the grounds on which to hold public hearings is whether the hearings "would be in the public interest." Given the reluctance of the FDIC to release additional information concerning the non-public portion of Wal-Mart Bank's business plan and given the numerous requests for public hearings that the FDIC has received, hearings would clearly be in the public's interest.

Signed: Gary Ackerman, Michael Capuano, Julia Carson, William Lacy Clay, Emanuel Cleaver, Geoff Davis, Barney Frank, Paul Gillmor, Katherine Harris, Darlene Hooley, Paul Kanjorski, Sue Kelly, Steve LaTourette, Jim Leach, Barbara Lee, Stephen Lynch, Carolyn McCarthy, Carolyn Maloney, Gary Miller, Gwen Moore, Bernie Sanders, Chris Shays, Brad Sherman, Nydia Velazquez, Debbie Wasserman-Schultz.