FDIC board authorizes RFI on industrial banks and parent companies

The FDIC board voted to publish a request for information (RFI) inviting public comment on industrial banks and industrial loan companies (ILCs), focusing on how the FDIC evaluates statutory factors, the characteristics and complexity of parent companies, and other issues raised by recent interest in the industrial bank charter.

Catherine Topping, counsel in the FDIC legal division, said the RFI would seek input on how the FDIC reviews certain applications and notices submitted by industrial banks and ILCs in evaluating applicable statutory factors. She said the preamble notes that all existing FDIC‑insured industrial banks are state nonmember banks and that the Competitive Equality Banking Act (CEBA) of 1987 excluded industrial banks from the Bank Holding Company Act definition of bank.

Topping told the board there are currently 24 operating industrial banks owned by both financial and commercial firms and that five states—Utah, Nevada, California, Hawaii, and Minnesota—may continue to charter industrial banks under CEBA’s grandfathering provisions. She described part 3 54 of the FDIC’s rules (adopted in December 2020) as the agency’s supervisory framework for industrial banks, requiring capital and liquidity maintenance agreements and prior FDIC approval for certain material changes.

Acting Chairman Hill said the RFI would present stakeholders an opportunity to provide feedback to inform the FDIC’s policy development on ILCs; Director Rodney Hood and Director Vogt voiced support. The board approved the resolution to publish the RFI; staff said it will be published in the Federal Register with a 60‑day comment period.