{"id":4520,"date":"2019-03-13T19:59:50","date_gmt":"2019-03-13T19:59:50","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=4520"},"modified":"2021-06-15T13:43:20","modified_gmt":"2021-06-15T13:43:20","slug":"community-bankers-renew-objections-to-square-ilc-application-in-new-white-paper","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/archive\/community-bankers-renew-objections-to-square-ilc-application-in-new-white-paper\/","title":{"rendered":"Community Bankers Renew Objections to Square ILC Application in New White Paper"},"content":{"rendered":"\n

Issuing a white paper\nthat details its objections to the industrial loan company (ILC) charter, the\nIndependent Community Bankers of America (ICBA) this week urged Congress to\n\u201cclose the ILC loophole permanently.\u201d <\/strong><\/p>\n\n\n\n

Leading payments\nprovider Square has applied for an ILC charter in hopes of furthering the\nfinancial services it offers to its customers, enabling it to offer loans directly\nto consumers and businesses. <\/strong><\/p>\n\n\n\n

The ICBA specifically cited the application of Square and\nother fintech companies for the charter in its announcement<\/a>,\nsaying that the companies have submitted applications for ILC charters and subsequently\nfor deposit insurance from the FDIC \u201cto benefit from the federal safety net\nwhile avoiding the legal restrictions of the Bank Holding Company Act.\u201d <\/p>\n\n\n\n

\u201cIn the new era of big data, tech conglomerates, and\nartificial intelligence, we should stop and think before giving these companies\nfurther reach into the economic lives of Americans,\u201d ICBA President and CEO Romero\nRainey said in a press release. \u201cFDIC approval of new ILC deposit insurance\napplications would put the federal safety net, and ultimately the American\ntaxpayer, at risk.\u201d<\/p>\n\n\n\n

Square had initially applied for the charter in 2017 and resubmitted<\/a>\nits application in December after withdrawing it to address regulator concerns.\n<\/p>\n\n\n\n

The ICBA paper<\/a>\noutlines in detail the specific harms it says would result from granting an ILC\ncharter to a company like Square. Industrial loan companies can be chartered in\nUtah and a few other states but can operate nationally. They are able to lend\nas banks, it said, while being exempt from the definition of a \u201cbank\u201d as\noutlined by the Bank Holding Company Act. <\/p>\n\n\n\n

According to the ICBA, one of the objectives of that act was\nto prevent \u201cconcentration of economic power.\u201d<\/p>\n\n\n\n

\u201cCommercial company ownership of ILCs will effectively\ncombine banking and commerce, contrary to long standing American economic\npolicy,\u201d the organization wrote. <\/p>\n\n\n\n

\u201cThe industrial loan company loophole allows commercial\ninterests to own full-service banks while avoiding key regulations and\nconsolidated supervision by the Federal Reserve\u2014threatening the financial\nsystem and creating an uneven regulatory playing field,\u201d Rainey said. <\/p>\n\n\n\n

\u201cAny company that wishes to own a full-service bank should\nbe subject to the same restrictions and supervision that apply to any other\nbank holding company. To support a safe and sound financial system and to\nmaintain the separation of banking and commerce, the FDIC should reinstate the\nmoratorium on ILC applications and Congress should close this loophole for\ngood.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Issuing a white paper that details its objections to the industrial loan company (ILC) charter, the Independent Community Bankers of America (ICBA) this week urged Congress to \u201cclose the ILC loophole permanently.\u201d <\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1015],"tags":[80,291,391,398,828],"class_list":["post-4520","post","type-post","status-publish","format-standard","hentry","category-archive","tag-banking-charter","tag-fdic","tag-icba","tag-ilc","tag-square"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4520"}],"version-history":[{"count":1,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4520\/revisions"}],"predecessor-version":[{"id":6720,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4520\/revisions\/6720"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4520"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}