A bipartisan group of U.S. Representatives, led by Rep. Blake Moore (R-UT), has formally requested that FDIC Chair Martin Gruenberg withdraw a proposed rule concerning the parent companies of industrial banks and industrial loan companies (ILCs). The representatives argue that the rule could introduce uncertainty and hinder ILCs' ability to provide essential products and services to consumers.
The letter from the representatives states that the proposed rule “overturns the governance regime of existing banks and lengthens the already complex application process for new charters, despite no congressional authorization or evidence that the present regulatory structure is not working.” It emphasizes that ILCs are already subject to the same laws, regulations, and oversight as other state banks and FDIC-insured depository institutions.
In support of this stance, the American Financial Services Association (AFSA) also submitted a letter to the FDIC. AFSA highlighted that industrial banks continue to meet community needs with financial strength. They expressed concern that implementing this rule would restrict these institutions' operations and diminish their benefits. AFSA urged Chair Gruenberg to retract the proposal, arguing it would help diversify risk concentration currently associated with a few large institutions.
The issue has garnered attention across various sectors, including automotive organizations such as the Alliance for Automotive Innovation and National Automobile Dealers Association, which have also addressed letters to Chair Gruenberg.
The efforts have received appreciation from numerous members of Congress for their leadership on this matter: Congressman Blake Moore (R-UT), Congressman John Curtis (R-UT), Congressman Burgess Owens (R-UT), Congresswoman Celeste Maloy (R-UT), Congressman Bill Huizenga (R-MI), Congressman Frank Lucas (R-OK), Congressman Mark Amodei (R-NV), Congresswoman Dina Titus (D-NV), Congresswoman Lisa McClain (R-MI), Congressman Shri Thanedar (D-MI), Congressman Steven Horsford (D-NV), Congressman C.A. Dutch Ruppersberger (D-MD), Congresswoman Haley Stevens (D-MI), Congressman Steve Cohen (D-TN), Congressman Ritchie Torres (D-NY), Congressman Vicente Gonzalez (D-TX), Congressman Joseph Morelle (D-NY), Congressman Pete Sessions (R-TX) and Congressman Timothy Kennedy (D-NY).