Industrial Bank Subsidiaries of Financial Companies

Résumé

The FDIC is publishing for comment proposed rules that would impose certain conditions and requirements on each deposit insurance application approval and non-objection to a change in control notice that would result in an insured industrial loan company or industrial bank (collectively "industrial bank" or "ILC") \1\ becoming, after the effective date of any final rules, a subsidiary \2\ of a company that is engaged solely in financial activities and that is not subject to consolidated bank supervision by the Federal Reserve Board or the Office of Thrift Supervision ("Federal Consolidated Bank Supervision"). The proposed rules would also require that before any industrial bank may become a subsidiary of a company that is engaged solely in financial activities and that is not subject to Federal Consolidated Bank Supervision (a "Non-FCBS Financial Company"), such company and the industrial bank must enter into one or more written agreements with the FDIC. Simultaneously with the proposed rules, the FDIC is publishing a Notice to extend for one year its moratorium for applications for deposit insurance and change in control notices for industrial banks that will become subsidiaries o