Following last week’s announcement that the Federal Deposit Insurance Corporation (FDIC) approved Ford Motor Company and General Motors Company to establish industrial loan companies, a bipartisan bill was introduced in the U.S. Senate to close the industrial loan company loophole.
The loophole in the Bank Holding Company Act allows commercial and fintech companies to own or acquire industrial loan companies (ILC) chartered in a handful of states without being subject to federal consolidated supervision.
Introduced by Senate Banking Committee members John Kennedy (R-LA) and Andy Kim (D-NJ), the Close the Shadow Banking Loophole Act would close the ILC loophole to mitigate risks to consumer privacy, the financial system and the economy.
IBAT is in contact with Senators John Cornyn (R-TX) and Ted Cruz (R-TX) to encourage their support for the Close the Shadow Banking Loophole Act.
