Home Depot loan plan opposed

WASHINGTON — Major trade groups representing Realtors and community bankers on Monday sought to block Home Depot Inc.'s recent plan to offer home-improvement loans.

However, the overall resistance to Home Depot's move appeared tepid compared with the outcry triggered by a similar bid from Wal-Mart Stores Inc. last year.

In separate letters to the Federal Deposit Insurance Corp., the National Association of Realtors, with 1.3 million members, and the Independent Community Bankers of America, which represents close to 5,000 banks, asked the FDIC to hold public hearings for just the second time in the agency's history on these applications.

"Home Depot's proposed business plan is a perfect example of why banking and commerce should not be mixed," NAR president Thomas Stevens said in a letter to the FDIC. "This plan will have an anti-competitive effect and adversely affect Home Depot's competitors and other banks."

The letter includes more than 50 signatures from state and territorial representatives.

Critics have alleged that Home Depot would gain an unfair competitive advantage if it could offer both home-improvement loans and equipment to customers. Stevens' group doesn't compete directly with Home Depot but has frequently weighed in on issues related to the mixture of banking and commerce.

In early May, the Atlanta-based retailer announced it was buying EnerBank USA, a subsidiary of CMS Energy. EnerBank has a Utah-based industrial loan charter, allowing it to to make loans and conduct other banking services.

Almost immediately after announcing the acquisition, Home Depot filed a change of ownership application with the FDIC, which offers deposit insurance for ILCs. Comment letters were due Monday. It must also receive permission from the state of Utah.

"EnerBank has a demonstrated regulatory compliance track record and an established working rela- tionship with regulators, and the Home Depot will continue to be responsive to the FDIC and the state of Utah as it seeks approval for the acquisition," Home Depot spokesman Jerry Shields said late Monday in an e-mailed statement.

Close to 60 other companies, including Target Corp., also have ILCs, but such arrangements have attracted more scrutiny in the last year, in part because Wal-Mart's plan drew a lot of attention. More than 4,000 comment letters were filed on Wal-Mart's proposal, the majority of which said Wal-Mart shouldn't be allowed to offer any banking services.

Wal-Mart has argued that it only plans to use the charter to process payments such as credit cards, but some in the banking industry have argued that Wal-Mart might eventually broaden its services.

Home Depot has said it plans to offer more banking services, including loans.

As of Monday afternoon, when the Home Depot letters were due, FDIC spokesman David Barr said roughly 260 had been filed.

"We'll continue to accept the comment letters even if they come in after the deadline," he said.