CUNA backs Senate bill to close ILC loophole

CUNA supports a bill to close the industrial loan company (ILC) loophole, introduced Tuesday by Senate Banking Committee Chairman Sherrod Brown, D-Ohio, Sen. Bob Casey, D-Pa., and Sen. Chris Van Hollen, D-Md. The bill would close a loophole that allows ILC to gain all of the advantages of an FDIC-insured bank charter.

“This bill would prevent the further exploitation of the ILC loophole by firms seeking the advantages of an FDIC-insured bank charter without the supervision and regulation established by Congress. The regulatory loophole creates safety and soundness risks to financial institutions and consumers, and we thank Sen. Brown for his leadership on this issue.”

CUNA wrote to Senate Banking, Housing, and Urban Affairs Committee leadership in support of the bill Tuesday. The House Financial Services Committee advanced a similar bill in June, the Close the ILC Loophole Act (H.R. 5912).