Amazon.com, Facebook, Walmart and other corporate giants may soon give Wall Street a run for its money as a key US regulator smooths the path for nonbanks to get into lending. The Federal Deposit Insurance Corp has 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. The measure will "provide transparency to market participants regarding the FDIC's minimum expectations for parent companies of industrial banks," said chairman Jelena McWilliams. The new rule formalizes years of agency practice with the ILC charters, which were created to let commercial firms make small loans to workers but have morphed to become a back door into big-time banking. Bankers have called for a halt in approving new charters until Congress closes a loophole that allows what they see as an unfair advantage.

Source: The Standard December 16, 2020 19:07 UTC