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THE LATEST
House Subcommittee reaffirms the Strengths and Regulatory Oversight of Industrial Banks
This week the US House Financial Services Committee Subcommittee on Consumer Protection and Financial Institutions conducted a hearing “The Future of Banking: How Consolidation, Nonbank Competition, and Technology are Reshaping the Banking System”. Several witnesses provided verbal and written testimony regarding their views on serving consumers, community banks, new advances in technology for financial services, and consumer protection.

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Respected Academics Reaffirm Safety Of Industrial Banks

The Utah Center for Financial Services at the University of Utah just released a new comprehensive study “Source of Strength and Consolidated Supervision: A Comparative Assessment of Industrial Banks and Commercial Banks”,  by Dr. James Barth and Dr. Yanfei Sun.”

“This new study is impressive. The conclusions underscore the judgement of accomplished scholars – industrial banks are the safest and soundest financial institutions in the country. The authors also document that the supervision provided by the FDIC and state regulators is equal to that of any other bank,” stated Frank Pignanelli, Executive Director, National Association of Industrial Bankers.

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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.)

IN THE NEWS
Regulators hit reset on CRA reform, commit to joint rulemaking

Federal bank regulators committed to rescinding the Trump-era reform of the Community Reinvestment Act, announcing a second attempt at an interagency rulemaking to modernize the anti-redlining law.

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Ameriprise Financial Applies for a State Industrial Bank Charter
 Ameriprise Financial (NYSE: AMP) has filed an application to convert Ameriprise Bank, FSB to a state-chartered industrial bank (IB) regulated by the Utah Department of Financial Institutions (UDFI) and the Federal Deposit Insurance Corporation (FDIC).
 
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.

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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.

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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.

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