Home Depot rescinds bid for EnerBank
Home Depot has ended its pursuit of EnerBank USA, a home improvement lender the Atlanta retailer had hoped to purchase with the goal of forming an industrial loan company (ILC).
Home Depot spokesman Ron Defeo said the retailer informed EnerBank of the decision last week.
“As we move into our fiscal 2008 year, this acquisition is no longer a part of our strategy as we are focusing all of our resources on our core retail business,” Defeo explained. “As of now, we have no plans to pursue this type of strategy.”
Currently, a moratorium is in effect by the Federal Deposit Insurance Corp. (FDIC) on approvals of new ILCs until Jan. 31. Home Depot is pulling out of its bid just as the waiting period set by the FDIC is due to expire next week
Most recently, the U.S. House of Representatives overwhelmingly passed legislation that would stop retailers and other commercial companies from starting ILCs. The legislation would bar non-financial companies from owning or starting ILCs, a process both Home Depot and Wal-Mart have undertaken in the last year. Wal-Mart has since withdrawn its application to establish an ILC.
While critics of ILCs say the banks hurt competition by giving too many assets to too few large companies, proponents say ILCs foster competition by reducing fees and costs to consumers.