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The Federal Deposit Insurance Corporation (FDIC) is seeking comments on proposed amendments to its regulation governing parent companies of industrial banks and industrial loan companies. This regulation, which was adopted in December 2020, requires certain conditions and written commitments in situations that would result in an industrial bank or industrial loan company becoming a subsidiary of a company that is not subject to consolidated supervision by the Federal Reserve Board. The proposed amendments would revise the definition of ‘‘Covered Company’’ to include conversions involving a proposed industrial bank or industrial loan company under section 5 of the Home Owners’ Loan Act, or other transactions as determined by the FDIC; ensure that a parent company of an industrial bank subject to a change of control, or a parent company of an industrial bank subject to a merger in which it is the resultant entity, would be subject to the FDIC’s regulation; and provide the FDIC the regulatory authority to apply the regulation to other situations where an industrial bank would become a subsidiary of a company that is not subject to Federal consolidated supervision. Additionally, the proposed amendments would clarify the relationship between written commitments and the FDIC’s evaluation of the relevant statutory factors. The proposed amendments also would set forth additional criteria that the FDIC would consider when assessing the risks presented to an industrial bank or industrial loan company by its parent company and any affiliates and evaluating the institution’s ability to function independently of the parent company and any affiliates.
