ICBA called on the FDIC to deny Rakuten Bank America’s federal deposit insurance application and impose an immediate moratorium on industrial loan company applications.
In a comment letter
to the agency, ICBA said the application would allow the "Amazon of Japan's" subsidiary to skirt regulatory oversight and violate U.S. policy separating banking and commerce.
ICBA noted that the ILC loophole allows these financial institutions and their parent companies to avoid Bank Holding Company Act regulations and oversight, threatening the financial system and creating an uneven regulatory playing field.
ICBA also said this application presents the mixing of commerce and banking at a new and unprecedented level due to Rakuten Inc.'s vast e-commerce and other commercial activities, including the formation of its own professional baseball team.
In a comprehensive white paper
released earlier this year, ICBA detailed the transformation of the ILC charter into the fashionable charter of choice for financial firms seeking to benefit from the federal safety net while avoiding legal restrictions and company oversight.
Read ICBA Release