FDIC Approves Rule to Ensure Safety and Soundness of Industrial Banks — 2020-12-15

WASHINGTON— The Federal Deposit Insurance Corporation (FDIC) approved a final rule that will require certain conditions and commitments for each deposit insurance application approval, non-objection to a change in control notice, and merger application approval that would result in an insured 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 final rule is substantially similar to the proposed rule, and it will require a covered parent company to enter into written agreements with the FDIC and the industrial bank to: address the company’s relationship with the industrial bank; require capital and liquidity support from the parent to the industrial bank; and establish appropriate recordkeeping and reporting requirements.