Edward Jones seeks FDIC coverage for industrial loan company
WASHINGTON — The Edward Jones investment firm is seeking federal deposit insurance coverage for an industrial loan company charter, making it the latest nonbank to pursue the ILC route into banking.
The application, filed with the Federal Deposit Insurance Corp. by Jones Financial Cos., is for the Edwards Jones Bank, which would be based in Utah. If approved, the bank would be led by Ray Dardano, who was CEO of Marlin Business Bank in Salt Lake City.
“An affiliated bank would enable us to broaden our offerings for retail investors, while also supporting our approach to helping Edward Jones branch teams ensure our 7 million clients feel understood, informed, secure and in control,” Ken Cella, a principal with Edward Jones, said in a press release this week.
“Given market conditions, we believe the need for enhancements to our financial services is more important than ever to our clients as they look to reach their financial goals," Cella said.
The FDIC in March approved ILC-related applications for the first time since the financial crisis: one by the small-business payments firm Square, and another by the student loan servicer Nelnet. The FDIC is also in the midst of reworking how it regulates industrial banks.
Managing about $1.2 trillion in assets, Edward Jones has traditionally focused on individual and small-business investment strategy since it was founded in 1922. But its clients “are looking for a centralized source for saving, spending and borrowing," Matt Burkemper, another Edward Jones principal, said in the release.
The press release also stressed to clients that the “bank application process is expected to take an extended period of time,” with the firm advising that bank operations may not begin until late 2021 if approval is granted.