ICBA Statement on Rakuten ILC Application

Jul 29, 2019

Washington, D.C. (July 29, 2019)—Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on Rakuten's application for an industrial loan company charter.

"ICBA and the nation's community banks oppose Rakuten's application to become an industrial loan company because the ILC charter is a loophole that should be closed by policymakers. There is nothing innovative about large tech firms attempting to exploit the lax ILC regulatory regime.

"As ICBA said in a comprehensive white paper earlier this year, the ILC loophole allows certain financial institutions and their parent companies to skirt regulatory oversight—endangering consumers, threatening the financial system and creating an uneven regulatory playing field. ICBA continues urging the Federal Deposit Insurance Corp. to impose an immediate moratorium on approving deposit insurance for these companies and Congress to close the ILC loophole permanently.

"Any company that wishes to own a full-service bank should be subject to the same restrictions and supervision that apply to any other bank holding company. FDIC approval of new ILC deposit insurance applications would put the federal safety net, and ultimately the American taxpayer, at risk. ICBA will continue working with policymakers to address this loophole and maintain the separation of banking and commerce."

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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