Banks Back FDIC Proposal to Restrict Industrial Loan Companies

Banks have lined up to support a Federal Deposit Insurance Corp. plan that would make it far more difficult for companies such as Ford Motor Co. to start their own banks.

The proposal would increase regulatory scrutiny of applications from “industrial loan companies” seeking federal deposit insurance and require those companies to prove they could stand on their own without support from their nonbank parent companies. The rule would give the FDIC the power to review any changes in control at an ILC, also known as an industrial bank, including the replacement of CEOs and other top executives. ...