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ICBA Statement on Rakuten ILC Application

Washington, D.C. (July 29, 2019)—Independent Community Bankers of America® (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on Rakuten’s application for an industrial loan company charter.

“ICBA and the nation’s community banks oppose Rakuten’s application to become an industrial loan company because the ILC charter is a loophole that should be closed by policymakers. There is nothing innovative about large tech firms attempting to exploit the lax ILC regulatory regime.

“As ICBA said in a comprehensive white paper earlier this year, the ILC loophole allows certain financial institutions and their parent companies to skirt regulatory oversight—endangering consumers, threatening the financial system and creating an uneven regulatory playing field. ICBA continues urging the Federal Deposit Insurance Corp. to impose an immediate moratorium on approving deposit insurance for these companies and Congress to close the ILC loophole permanently.

“Any company that wishes to own a full-service bank should be subject to the same restrictions and supervision that apply to any other bank holding company. FDIC approval of new ILC deposit insurance applications would put the federal safety net, and ultimately the American taxpayer, at risk. ICBA will continue working with policymakers to address this loophole and maintain the separation of banking and commerce.”

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