National Association of Industrial Bankers

THE LATEST

House Subcommittee reaffirms the Strengths of Industrial Banks

On April 15, the US House Financial Services Committee Subcommittee on Consumer Protection and Financial Institutions conducted a hearing “Banking Innovation or Regulatory Evasion? Exploring Trends in Financial Institution Charters.” Several witnesses provided verbal and written testimony regarding their views on various banking charters, new advances in technology for financial services, consumer protection and data privacy.

“In the 2 1/2 hours of this committee hearing, there was no dispute that industrial banks are among the safest and soundest financial institutions in the country. Some of the witnesses speculated about doomsday hypothetical scenarios that have never occurred in the nearly 40 year history of modern industrial banks, Further, no details were provided to counter the fact that industrial banks are fully regulated by federal and state authorities and have demonstrated an impressive track record of safety and soundness,” stated Frank Pignanelli, Executive Director, The National Association of Industrial Bankers.

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.)

UCFS Brokered Deposits Report Released

James R. Barth and Yanfei Sun of Auburn University conducted a study for the Utah Center for Financial Services (UCFS) examine brokered deposits in the context of their origin, regulatory history, use, and performance.

An OCC Insider’s Perspective on Fintechs and Bank Charters

While the novel fintech charter may never actually be granted, the concept ironically may usher in a rash of neobanks under full national charters, like Varo Bank. In a way that may end up creating a more level playing field.

FDIC finishes long-awaited rules on brokered funds, ILCs

Banks and some of their deposit-gathering businesses won additional regulatory relief when the Federal Deposit Insurance Corp. finalized a new framework for classifying brokered deposits enabling a broader set of companies to escape restrictions.

Politico PRO Q&A: FDIC Chairman Jelena McWilliams

FDIC Chairman Jelena McWilliams is overseeing the banking system in the middle of an economic crisis, while working to adapt to new technology and grappling with evolving risks from climate change.

FDIC chair hopes regulators will ‘come together’ on CRA reform: Report

The head of the Federal Deposit Insurance Corp. became the second top regulator in two weeks to voice support for an interagency framework to reform the Community Reinvestment Act.

Banner year for de novos

Groups hoping to open new banks hit their stride in 2018.

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.

Jelena McWilliams, the new FDIC chairman, has signaled that the agency will be more supportive of de novo banks. The FDIC, for instance, recently announced that it is seeking public comment to improve the application process.