By John Poirier
WASHINGTON, May 21 (Reuters) - The U.S. House of Representatives on Monday voted 371-16 to pass a bill barring commercial companies from operating a bank, seeking to maintain a separation between the two industries.
The measure requires a company to generate at least 85 percent of its revenues from financial services in order to own and operate a type of bank known as an industrial loan company (ILC).
The vote was taken in the midst of a one-year regulatory moratorium on ILC applications by commercial companies. The Federal Deposit Insurance Corporation, which reviews the applications, has given Congress until January 2008 to decide.
The bill also seeks to grandfather ILCs established before October 2003, but would place some restrictions on certain ILCs that changed ownership after that date.
Similar legislation was introduced in the U.S. Senate earlier this month.
ILCs are state-chartered banks with access to federal deposit insurance. They can offer deposit accounts, mortgages, credit cards, loans and other services.
U.S. banks, especially smaller ones, have voiced concern about a surge in ILCs over the last two decades, saying they could be forced out of business if Wal-Mart Stores Inc. and Home Depot Inc. enter the industry.
Target Corp. and German automakerAG , already have ILCs.
In March, Wal-Mart abandoned plans to open an ILC and Home Depot has an application pending before the FDIC.
Home Depot, which opposes the bill, said applications filed with the FDIC before any legislation was considered should be allowed to proceed even if such legislation becomes law.
"Our application is strong and has been submitted within existing laws," Home Depot spokesman Tony Wilbert said.
ILCs, which represent less than 2 percent of industry assets, have grown to $212 billion at the end of 2006, according to the FDIC's latest figures. The biggest ILC bank is Merrill Lynch Bank USA , which had about $67 billion in assets last year.
"It is my hope that the Senate can find a consensus approach as well to remove the cloud of uncertainty over the ILC charter and allow the ILC industry to continue as a strong, safe and sound component of the banking sector," FDIC Chairman Sheila Bair said.