Banks, Fintechs Clash on Big Tech Banking Charters in FDIC Plan

Allowing Big Tech companies such as Amazon.com Inc., Alphabet Inc.'s Google, and Meta Platforms Inc.'s Facebook to acquire specially chartered banks risks destabilizing the financial system and harming competition, banks and consumer advocates warned.

The Federal Deposit Insurance Corp. is looking to ease the path for granting industrial loan company charters that allow nonbank parent companies such as automakers and retailers to acquire or establish their own banks.

But permitting tech giants to pick up ILCs, which have state charters but carry federal deposit insurance, would give them an unfair advantage, critics said.

Big Tech companies raise a special ...