ICBA told the FDIC that commercial firms should not own full-service banks or industrial loan companies, even if they are subject to enhanced supervision and regulation.
In a recent comment letter on an FDIC proposal to strengthen its supervisory processes for ILC parent companies, ICBA commended the agency for issuing the proposal. However, ICBA said the agency plan falls short of ensuring the safety and soundness of these companies.
ICBA said ILC holding companies should be subject to the Bank Holding Company Act and the consolidated supervision of the Federal Reserve rather than the supervision of the FDIC. ICBA also noted deficiencies with the FDIC’s proposal, including that it stops short of establishing capital requirements that would ensure ILC parents are a source of strength for their subsidiaries.
Community bankers can use ICBA's Be Heard grassroots action center to urge their senators to co-sponsor legislation to close the ILC loophole.