The ILC Question
Fintech Nexus
One potential conduit for new forays into banking activity is the Industrial Loan Company (ILC) designation. Crucially, ILCs are not defined as banks under the Bank Holding Company Act, enabling parent companies to engage in commerce while de facto operating as a full bank and sustaining controlling stakes from investors who engage in non-bank activity (think VCs); they also are not supervised by the Federal Reserve, but are subject to state laws and Federal Deposit Insurance Corporation (FDIC) supervision.
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