US: Foes of Home Depot Bank Looking for TR

Nearly 440 letters, mostly complaints, have been sent to a U.S. banking regulator since Home Depot Inc. announced plans in early May to buy a home-improvement lender.

Most of the comments from bankers, trade groups and others argue that the retailer's efforts to acquire EnerBank USA could hurt small financial institutions, and breach the usual separation of banking and commerce.

In a letter filed June 7 with the Federal Deposit Insurance Corp., Buffalo Grove-based American Enterprise Bank said it opposed Home Depot's plan.

"It would violate the longstanding policy of separating banking and commerce, would pose severe risks to the deposit insurance fund and would create competitive imbalances that could unfairly damage local financial institutions," Chief Executive David Schroeder said in his letter.

American Enterprise has $326 million in assets and branches in Buffalo Grove, Schaumburg and Highland Park.

Others speaking out against Home Depot include the 225-member Community Bankers of Wisconsin, as well as small institutions nationwide.

"I wonder if our bank should start selling lumber and building products?" wrote a senior lender for CSB Bank in Capac, Mich.

Said the head of Atwater, Minn.-based Cattail Bancshares Inc.: "It's incredible that we tolerate efforts to turn back the clock to an era when monopolies and vertically integrated businesses were considered acceptable ways of running the economy. Where is Teddy Roosevelt when we need him?"

Of those sending comments about the Atlanta-based home improvement chain's plans, 413 submitted form letters.

Still, reaction to Home Depot's efforts to buy a bank from Jackson, Mich.-based CMS Energy Corp. has been muted compared with the outcry against Wal-Mart Stores Inc.

About 4,000 comments, some of them form letters, have been sent to the FDIC since the world's biggest retailer announced last year that it wanted to start a special-purpose Utah bank to process in-house its check, debit and credit transactions.

Meanwhile, Home Depot's object of desire, Salt Lake City-based EnerBank, makes consumer installment loans for a broad range of home improvement projects, including door and window installation, heating and air conditioning upgrades, and kitchen and bath remodeling. EnerBank gets its business through referrals by home improvement and remodeling contractors.

Bank deal: St. Louis-based First Banks Inc. announced Thursday that it plans to buy Oak Lawn-based TeamCo Inc. and its Oak Lawn Bank unit for $13.9 million in cash. Oak Lawn's two branches, including one in Orland Park, will complement First Banks' 26 Chicago-area branches.

Getting out more: Travelers Insurance, which has done little consumer advertising in the past, is preparing an estimated $100 million national campaign, Advertising Age reported earlier this week.

Travelers is now poised to crack the top 10 of insurance ad spending, the magazine reported.

Other big budgets include: Geico, $403 million; Bloomington-based State Farm, $306 million; Northbrook-based Allstate Corp., $286 million; Progressive, $252 million; and Blue Cross Blue Shield, $108 million, Ad Age said.

• 186 Financial Services, Insurance and Banking