Reply #70: it appears Bernanke is not in favor of corporate owned "banks"

[UpInArms]

http://www.contracostatimes.com/mld/cctimes/business/14153543.htm

WASHINGTON - Federal Reserve Chairman Ben Bernanke is raising concerns about a legal provision that lets companies own a certain kind of bank, including one Wal-Mart Stores Inc. wants to operate in Utah.

The Fed chief's comments were aimed at an exemption in federal law that allows companies to own such banks, called industrial loan companies.

"The question of whether, or to what extent, the mixing of banking and commerce should be permitted is an important issue and one that we believe should be made by Congress," Bernanke said. "The decision has important ramifications for the structure of the American financial system and the economy, particularly because any widespread combinations of banking and commerce likely would be irreversible."

Bernanke's comment came in a written response to questions on that and other issues raised by Rep. Brad Sherman, D-Calif., during a February hearing. Bernanke's response, dated Monday, was released to The Associated Press on Tuesday.

"It is for these reasons that the (Fed) board has encouraged Congress to review the exemption in current law," Bernanke wrote.

The Fed chief addressed the matter in broad terms. He didn't mention Wal-Mart specifically.

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