James A. Leach: “it is with a great deal of reluctance that I rise in opposition to this bill. It contains many reasonable provisions…”

“it is with a great deal of reluctance that I rise in opposition to this bill. It contains many reasonable provisions, most importantly, the payment of interest on business checking, with my only concern on that point being that it does not immediately go into effect, but rather is put off for several years. It also contains a very reasonable provision that interest be paid by the Fed on sterile reserves held by institutions. But deeply embedded in this bill is a philosophical umbrage of very profound proportions. There is a small charter, as referred to by the gentleman from Utah, called the industrial loan corporation (ILC) charter. For the first time, the Congress is moving in the direction of giving this kind of charter the powers that make it the functional equivalent of banks. While the gentleman from Utah is correct that there is no effort to offer demand deposits, there is the authorization of business checking accounts which are their functional equivalent. This particular charter countenances, and indeed there are a number today, the merger of commerce and banking; that is, nonfinancial institutions may own ILC charters. There is also no prohibition about new charters being granted, so new charters presumably can be offered on passage of this act.”