American Financial Services Association

FDIC Finalizes ILC Rules

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FDIC Finalizes ILC Rules

This week, the FDIC finalized a rule to require certain conditions and commitments for each deposit insurance application approval from an industrial bank or industrial loan company (ILC) whose parent company is not subject to consolidated supervision by the Federal Reserve Board.

According to the FDIC, the rule will accomplish two important goals: “1. Ensure that the parent of a covered industrial bank approved for deposit insurance serves as the source of strength for the industrial bank; and 2. Provide transparency to future applicants and the broader public as to what the FDIC requires of parent companies of covered industrial banks.”

AFSA commented on the rule when it was proposed and is pleased that the FDIC accepted its comments. As AFSA suggested, the final rule will apply only prospectively as of the effective date of the rule. In addition, the FDIC revised its rules regarding board representation.

December 18th, 2020 by