Growing controversy over innovative banking charters has made applications for non-traditional insured-depository charters a significant policy as well as business concern. As a result, an application from a brokerage company may set the bar for chartering industrial loan companies (ILCs) for parent companies with activities within the “financial in nature” parameters governing holding companies under FRB control. Arguably, a parent company within this definition could successfully seek a liberal charter from the FDIC, but that is not the path chosen here. Many firms contemplating bank charters and especially those with non-financial parents would likely find problematic the parent-company capital backstops, high leverage ratios, and inter-affiliate transaction restrictions promised in this application.
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