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The FANGs and other corporate giants may soon give Wall Street a run for its money as a key U.S. regulator is smoothing the path for nonbanks to get into lending. The Federal Deposit Insurance Corp. on Tuesday approved a final rule governing so-called industrial loan companies that will allow major businesses to seek banking charters while escaping capital and liquidity demands faced by dedicated financial firms.
“If the FDIC approves Rakuten’s application, it will set a precedent for every other Big Tech company (Amazon, Facebook, Google, etc.) to enter banking through an ILC charter without consolidated supervision,” the Bank Policy Institute, a Washington-based industry lobbying group, wrote in a blog post last month. Facebook declined to comment, and Amazon and Google didn’t respond to emails seeking comment. The FDIC said in a rule notice released Tuesday that the agency is obliged to implement federal law as it exists today, citing an increased urgency to clarify the application process as more companies express interest in seeking charters.
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