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.)
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