The Return of the ILC: The FDIC Issues a Proposal and Approval Orders
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Key takeaways:
- On March 17, 2020, the Federal Deposit Insurance Corporation proposed a regulatory framework to strengthen and codify its process for approving industrial bank insurance applications and the supervision of industrial bank holding companies.
- The following day, the FDIC published the approvals for Federal deposit insurance for the proposed Utah-charted industrial banks Nelnet Bank and Square Financial Services, Inc., the first approvals for industrial banks since 2008.
- These developments together make clear that (i) the FDIC is willing to move forward with FDIC insurance industrial bank applications, (ii) the insurance approvals are largely consistent with the proposed rule and (iii) the perceived financial strength of the industrial bank holding company is important in the FDIC’s evaluation of the requirements for approval.