Regulatory Alerts2021-02-23 | 2020-28473Parent Companies of Industrial Banks and Industrial Loan Companies
The Federal Deposit Insurance Corporation issued a final rule requiring industrial banks and industrial loan companies to execute written agreements with the FDIC whenever their parent entities fall outside Federal Reserve Board consolidated supervision. These agreements mandate capital and liquidity support, consumer data security reporting, board representation limits under fifty percent, and director appointment restrictions during the initial three-year subsidiary period. By codifying these supervisory commitments, the regulation ensures non-FRB-supervised parents serve as reliable sources of financial strength, thereby mitigating risks to the Deposit Insurance Fund and preserving institutional safety.
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