FDIC Parent Firm of Industrial Banks

Updated on: Aug 12, 2024

Latest Event


  • Aug. 2024 Fed Reg Proposal
  • On Aug. 12, 2024, FDIC published proposal in federal register comments by Oct. 11.
  • In Oct. 2024, CSBS issued comment letter against proposed 354.6, see #229604.

On Jul. 30, FDIC proposed amendments re scope and enhancements.

  • FDIC reported board approved a notice of proposed rulemaking to amend 12 CFR 354.
  • Part 354 governs parent companies of industrial banks and industrial loan companies.
  • Adopted in Dec. 2020, requires certain conditions and written commitments, #73464.
  • Amendments clarify and enhance framework to supervise industrial banks, mitigate risks to the Deposit Insurance Fund and provide transparency for market participants.
  • FDIC Chair Gruenberg, OCC Hsu supported; Vice Chair Hill, Director McKernan did not.
  • CFPB Chopra issued statement, favors greater transparency and faster processing.
  • Proposed Amendments
  • Amendments proposed by the FDIC would revise the definition of covered company.
  • Revises scope to include conversions involving a proposed industrial bank under the Home owners’ loan act; ensure parent of industrial bank would be subject to Part 354.
  • If there is change in control at parent or a merger in which parent is resultant entity.
  • Includes reservation of authority that would allow FDIC to apply to other transactions.
  • Clarifies relationship between written commitments and evaluation of statutory factors.
  • In addition, sets forth additional criteria that the FDIC would consider when assessing the risks presented to a shell or captive industrial bank by its parent organization.
  • Also, in evaluating industrial bank’s ability to operate in a safe and sound manner and function independently of the parent organization, including a rebuttable presumption.
  • That shell/captive nature weighs heavily against favorably resolving 1 or more factors.
  • Consultation
  • Comments must be received on or before 60 days after publication in federal register.
  • Aug. 2024 Fed Reg Proposal
  • On Aug. 12, 2024, FDIC published proposal in federal register comments by Oct. 11.
  • In Oct. 2024, CSBS issued comment letter against proposed 354.6, see #229604.
Regulators
CFPB; FDIC; OCC
Entity Types
Bank; BHC; Thrift
Reference
OCC: PR 2024-86, Sp, 7/30/2024; CFPB: Sp, 7/30/2024; FDIC: 89 FR 65556, 8/12/2024; Sp, PR-64-2024, Lt FIL-46-2024, Memo, RF, 7/30/2024; RIN 3064-AF88; Citation: 12 CFR 354;
Functions
Compliance; Exams; Financial; Legal; Reporting; Risk; Treasury
Countries
United States of America
Category
National Regulator
State
N/A
Products
Banking; Deposits; Loan
Rule Type
Proposed
Regions
Am
Rule Date
Jul 30, 2024
Effective Date
Oct 11, 2024
Rule ID
221122
Linked to
Reg. Last Update
Aug 12, 2024
Report Section
US Banking