Washington, D.C. (March 28, 2019)—Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on today’s remarks from Financial Stability Board Chairman and Federal Reserve Board Vice Chairman for Supervision Randal Quarles on big technology firms and the financial services industry.
“ICBA and the nation’s community banks commend Chairman Randal Quarles for his speech today on the potential effects of massive technology firms entering into financial services. ICBA agrees with Chairman Quarles that while technological innovation promises a more efficient financial system, monolithic tech firms and the decentralization of financial transactions pose risks to financial stability.
“For instance, ICBA continues calling on policymakers to close a legal loophole that allows industrial loan companies and their parent companies to skirt regulatory oversight, endangering consumers and the economy. ICBA’s recent ‘Industrial Loan Companies: Closing the Loophole to Avert Consumer and Systemic Harm’ white paper calls on the Federal Deposit Insurance Corp. to impose an immediate moratorium on approving deposit insurance for these companies and urges Congress to close the ILC loophole permanently.
“The ILC loophole allows commercial interests to own full-service banks while avoiding key regulations and consolidated supervision by the Federal Reserve—threatening the financial system, creating an uneven regulatory playing field, and violating the longstanding U.S. policy of separating banking and commerce. 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.
“In this era of big data, tech conglomerates, and artificial intelligence, we should stop and think before giving massive tech companies further reach into the economic lives of Americans. ICBA and community bankers look forward to engaging in discussion with Chairman Quarles and other policymakers to support a safe and sound financial system and to maintain the separation of banking and commerce.”
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 52,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 760,000 Americans and are the only physical banking presence in one in five U.S. counties. Holding more than $4.9 trillion in assets, $3.9 trillion in deposits, and $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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