Berkshire Hathaway scraps bank plan

Billionaire Warren Buffett's Berkshire Hathaway pulled an application to open a so-called industrial loan company due to the cost of computers it would have to purchase to meet federal banking requirements.

Berkshire scrapped plans to open an industrial bank in Salt Lake City, a Federal Deposit Insurance Corp. (FDIC) spokesman said Wednesday. Berkshire's decision came after the FDIC announcement last week to impose a six-month moratorium on approval of industrial bank applications.

The FDIC said last week it needed more time to evaluate the potential impact of limited-service banks on its deposit insurance fund and the economy as a whole. Congress held a hearing last month on whether to rein in industrial banks as more nonfinancial companies are seeking to open them.

The Berkshire bank was intended to service accounts for customers of R.C. Willey Home Furnishings, a Berkshire-owned furniture chain based in Salt Lake City, and Big O Tires, a Denver-based car-tire and auto-repair franchise.