ANALYSIS-Home Depot hopes for bank as ILC freeze winds down

By John Poirier

WASHINGTON, Jan 18 (Reuters) - Home Depot Inc (HD.N: Quote, Profile, Research, Stock Buzz) is making a fresh push to win regulatory approval to buy EnerBank USA, as the clock winds down this month on a bank industry-backed moratorium to keep retailers out of their business.

The U.S. banking industry's lobbying clout was among the factors that forced Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) last year to drop its attempt to open a bank. Home Depot has not given up and plans to update an application it first filed in 2006 with federal regulators to buy the Utah-based bank.

It hopes regulators will give the green light after the moratorium ends on Jan. 31 since Congress failed to pass legislation closing a loophole that allows nonfinancial companies to own a type of bank known as an industrial loan company (ILC). Federal law has historically sought to keep commerce and banking separate.

"We know there's going to be scrutiny of this application, and that there's going to be a lot of hard questions and issues," said Bryan Jacobs, a Home Depot lobbyist. "But the fact is EnerBank has been running for a long time."

EnerBank was created by CMS Energy Corp (CMS.N: Quote, Profile, Research, Stock Buzz), a big Michigan utility, in 2002 to provide unsecured loans to homeowners to buy more energy-efficient heating and cooling systems. Home Depot, like auto companies and Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) which already have ILCs, wants a bank to promote its business.

Atlanta-based Home Depot relies heavily on building and remodeling contractors, who make up about 35 percent of its sales. Sales totaled $79 billion in fiscal 2006, which ended January 31.

Home Depot would not comment on how EnerBank might affect its profits.