IBAT, alongside numerous other state community banking trade associations, signed a letter to the Chairman of the Senate Banking Committee urging action on legislation to permanently close the industrial loan company (ILC) loophole.
The Close the Shadow Banking Loophole Act (S. 3538) — introduced by Senate Banking Committee Chairman Sherrod Brown (D-Ohio) and Senator John Kennedy (R-La.) and sponsored by Senators Mike Braun (R-Ind.), Bob Casey (D-Pa.), Chris Van Hollen (D-Md.) and Roger Wicker (R-Miss.) — would require companies that acquire an ILC to be subject to the same consolidated supervision by the Federal Reserve as any other bank holding company.
The letter notes “…In an era of Big Data, social media and e-commerce conglomerates, artificial intelligence and financial technology, mixing banking and commerce extends the reach of these firms into the lives of American consumers and creates a new dimension of risk to consumer privacy, price manipulation and fraud.”
IBAT will urge action on the ILC legislation during the 30th Annual Congressional Visit in Washington, D.C. next week.