AFSA Reiterates Support for Industrial Bank Charters
The American Financial Services Association (AFSA) reiterated its support for industrial banks in a comment letter this week to the FDIC. The FDIC’s proposed industrial bank rule would require certain conditions and commitments for financial institutions seeking an industrial bank charter.
AFSA is pleased that the FDIC is again considering industrial bank charters. As the letter stated, “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 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’s letter stressed that the FDIC’s rulemaking should be prospective and must exempt existing industrial banks that are currently operating under the present, successful state and federal regulatory regime. AFSA emphasized that there have been no demonstrated supervisory failures, lack of capital support, or operational issues at any industrial bank or parent company that would support changing the current regulatory regime for existing industrial banks. AFSA’s letter also asked that the FDIC’s proposed rules regarding representation on an industrial bank’s board of directors be more balanced.
July 1st, 2020
