ILCs

More than three dozen organizations are asking the FDIC to reject Square’s pending application to become an industrial loan company, according to a letter filed Tuesday.

The vast majority of comment letters to the FDIC support the fintech’s banking venture, in stark contrast to the public outcry over the pre-crisis ILC bids by large retailers.

As suspense builds over which firm will be the first to seek the special-purpose charter, a side discussion has emerged over which financial services sector has the most to gain — or lose — from the new option.

The industrial loan company charter is getting more attention as doubts grow about a new federal license for fintechs.

The Office of the Comptroller of the Currency has gotten the ball rolling for financial technology firms trying to operate a national platform, but the FDIC and Federal Reserve should act to remove other policy roadblocks.

The payments processor was among numerous firms earlier this year to withdraw an ILC charter application over questions about its plan.

The Office of the Comptroller of the Currency has gotten the ball rolling for financial technology firms trying to operate a national platform, but the FDIC and Federal Reserve should act to remove other policy roadblocks.

Jelena McWilliams has signaled a thaw in the agency’s approach to industrial loan companies, but she said tech firms and other nonbanks seeking charters should face the same level of regulatory scrutiny as more traditional banks.

Applications this year are more than double the 2017 mark and the most since 2009. But with some fintechs withdrawing their bids, observers are urging caution.

The student loan servicer called the move a "temporary step back" in what it had expected to be a lengthy process.