As more and more high-tech companies seek industrial loan company (ILC) charters and foreign-based fintechs expand into the U.S., Members of Congress are countering with legislation to bar any company that is not wholly financial in nature from controlling an insured depository institution (IDI). Senate and House proposals differ, but each seeks to realign U.S. banking back to a more conventional construct in which only financial entities regulated at the parent-company level by the Federal Reserve may control IDIs. It remains to be seen if variations on these bills are enacted into law, but their provisions express political sentiments widely held on both sides of the aisle that may well influence pending FDIC chartering decisions and those by other federal regulators grappling with the increasing integration of banking, other financial services, retailing, payment processing, and even social media and online commerce.
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