FDIC Has High Bar for Industrial Bank Charters, McWilliams Says

Startup firms seeking an industrial loan company charter to enter banking won’t have an easy time obtaining federal deposit insurance, FDIC Chairman Jelena McWilliams said Nov. 15.

McWilliams told a conference sponsored by the Treasury Department’s Office of Financial Research that the Federal Deposit Insurance Corporation has not had the opportunity to process an industrial loan company (ILC) application “in a long time.”

“The threshold is not low,” she said. “The statutory requirements are pretty difficult to meet.”

ILCs, or industrial banks, are financial institutions that may be owned by nonbank holding companies. Utah and other states often charter ILCs, ...