02.25.25

FDIC May Ease ILCs’ Entrance Into Banking Space

by: Barbara Pianese

The Federal Deposit Insurance Corporation (FDIC) during the Biden administration was hesitant to offer federal deposit insurance to industrial loan companies (ILC), but many expect the regulator to be more receptive to such requests under the Trump administration. “We do expect ILC applications to increase notably, and approvals similarly to rise,” said Michele Alt, co-founder at advisory group Klaros Group and previously district counsel at the Office of the Comptroller of the Currency. Fintechs, especially those currently partnered with banks, may be interested in getting an ILC charter with FDIC coverage. Traditional lenders are unsettled by a potential easing of the FDIC's approach towards ILCs, expressing concern that enabling larger tech firms to easily enter the banking space could have dangerous implications.

Read the full article on The Banker