House Financial Services Committee reaffirms the Regulatory Oversight and Strengths of Industrial Banks
On May 19, the US House Financial Services Committee (HFSC) conducted a hearing “Oversight of Prudential Regulators: Ensuring the Safety, Soundness, Diversity, and Accountability of Depository Institutions.” Federal regulators offered verbal and written testimony regarding their views on various matters confronting financial institutions. FDIC Chairman Jelena McWilliams fielded several questions regarding industrial banks, which her agency supervises.
“Several members of the HFSC inquired of the Chairman her opinion regarding industrial banks. During these exchanges, there was no dispute that industrial banks are among the safest and soundest financial institutions in the country. Further, no statements were made in the hearing to counter the fact that federal and state authorities fully regulate industrial banks,” stated Frank Pignanelli, Executive Director, The National Association of Industrial Bankers.
Watch the House Financial Services Committee Virtual Hearing
Congratulations to America’s New Industrial Banks
Congratulations to Square and Nelnet for commencing operations of their new Industrial Loan Corporations (ILC) on March 1, 2021 and November 2, 2020, respectively. These FDIC-insured industrial banks operating in Utah are the first to open in the state since 2008.
“Square and Nelnet are great additions to the U.S. banking sector. We congratulate them for succeeding through the rigorous federal and state application process,” said Frank Pignanelli, Executive Director of the National Association of Industrial Bankers.
On March 18, 2020, the FDIC approved the applications submitted by Square Financial Services and Nelnet Bank for deposit insurance as new Industrial Loan Corporation (ILC) charters. Simultaneously, the Utah Department of Financial Institutions approved the industrial bank charter applications. (ILCs are also referred to as industrial banks.)
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Through Dec. 13, the Federal Deposit Insurance Corp. had approved 14 bank applications, with seven more pending. In comparison, the agency signed off on 10 total charters during the prior two years.
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