Discussing All Sides of Industrial Loan Companies
Washington, D.C. may be operating under one political party at both ends of Pennsylvania Avenue, but that doesn’t mean only one side of public policy should be discussed.
Unfortunately, that’s exactly what happened on March 12, when the Bank Policy Institute held a seminar which it said was intended to “encourage discussion on the role of Industrial Loan Companies (ILCs) in the modern financial system and to explain the latest regulatory environment governing ILCs.” The hosts of the seminar, however, did not invite a single representative from the ILC industry to take part.
“Failing to include anyone on the panel representing Industrial Banks makes me wonder if the actual purpose of the panel was to obfuscate the facts about Industrial Banks rather than educate interested stakeholders,” noted Frank Pignanelli, Executive Director of the National Association of Industrial Bankers, who agreed there was a need to examine industrial banks in today’s market.
AFSA has long pushed for the growth of industrial loan companies. Industrial banks are subject to the same banking laws and are regulated in the same manner as other depository institutions. They are supervised and examined both by the states that charter them and by the Federal Deposit Insurance Corporation (FDIC). They are subject to the same safety and soundness, consumer protection, deposit insurance, Community Reinvestment Act, and other requirements as other FDIC-insured depository institutions.
“The FDIC quarterly call report data conclusively demonstrate that Industrial Banks are among the safest and soundest financial institutions in the country,” Pignanelli continued. “The structure and substance of this event makes one thing perfectly clear, this one-sided discussion is not about the safety of Industrial Banks, how they serve their customers or the banking system. Instead, it was an hour-long infomercial about shutting out fair and effectively regulated competition.”
March 16th, 2021
