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ICBA-Opposed ILC Application Withdrawn

Sept. 26, 2018 — Nelnet withdrew its ICBA-opposed application to form an industrial loan corporation. The massive student-loan servicer said withdrawing the application with the FDIC and the Utah Department of Financial Institutions is a “temporary step back” in a long process of forming an ILC.

In a letter to the FDIC earlier this year, ICBA wrote that Nelnet’s proposal is designed to avoid the legal restrictions of the Bank Holding Company Act, like the since-withdrawn applications of SoFi Bank and Square.

ICBA also called on the agency to impose a two-year moratorium on future ILC applications, citing several previous moratoriums. ICBA noted that the ILC loophole allows commercial interests to own full-service banks while avoiding the legal restrictions and regulatory supervision that apply to other bank holding companies.

ICBA will continue calling on the FDIC to impose a moratorium and on Congress to permanently close the ILC loophole.

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