Senators Introduce Anti-ILC Legislation
Today, AFSA wrote a letter to the Senate Banking Committee in opposition to the recently introduced the Close the Shadow Banking Loophole Act, which targets the ability of Industrial Loan Companies (ILCs) charted entities to exist in the financial service marketplace.
Bipartisan Senators including Sherrod Brown (D-OH), Bob Casey (D-PA), Chris Van Hollen (D-MD), John Kennedy (R-LA), Roger Wicker (R-MS), and Mike Braun (R-IN) sponsored an anti-ILC bill will hinder financial innovation that provides unique solutions for many niche types of businesses in the banking system, including major automobile manufacturers and other diversified companies.
Industrial banks are heavily regulated, subject to the same banking laws, and regulated in the same manner as other depository institutions. They are supervised and examined by the states that charter them (Utah, California, Colorado, Nevada, Hawaii, Indiana, or Minnesota) 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.
AFSA expects a House version to be introduced soon and will update you if the Close the Shadow Banking Loophole Act moves through the legislative process.
December 15th, 2023
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