Fintechs Get Clearer Rules on Banking Licenses Under FDIC Plan
Proposal would impose new oversight on owners of industrial loan companies
WASHINGTON—Financial-technology firms and other businesses seeking to offer banking services will have a clearer set of rules to follow under a proposal by the Federal Deposit Insurance Corp.
The FDIC’s framework would impose new oversight on the owners of so-called industrial loan companies, which enjoy many of the same benefits as traditional banks but aren’t owned by a federally-supervised bank holding company.
The proposal would require that the parent provide capital and liquidity support to an industrial bank in an emergency. It also seeks to establish “appropriate” recordkeeping and reporting requirements, according to the FDIC.
“This proposal would ensure that parent companies serve as a source of strength for their industrial bank subsidiaries,” FDIC Chairman Jelena McWilliams said in a written statement.
“By codifying these requirements, the proposal would enhance transparency and provide important protections for the Deposit Insurance Fund,” she said.
The agency will seek public comment on the proposed rule before voting on it in coming months.