Industrial Bank Rush Tests U.S. Regulatory Standards

Industrial loan companies, or ILCs, can take federally insured deposits and make loans while allowing a nonbank parent to remain outside consolidated Federal Reserve supervision under the Bank Holding Company Act. That structure gives payments, automotive and investment firms a way to bring funding and financial services in-house, but it also raises concerns about conflicts of interest and risks to the Federal Deposit Insurance Corp.’s insurance fund. As of 2025, 23 industrial banks held about $247.4 billion in combined assets.

Since January 2026, the FDIC has conditionally approved deposit-insurance applications for four Utah-chartered ILCs: Ford Credit Bank, GM Financial Bank, Edward Jones Bank and Stellantis Bank. PayPal filed its application on Dec. 15, 2025, while proposals involving OneMain, Nissan and Affirm have remained under review. The expanding pipeline is sharpening calls for regulators to assess every applicant against rigorous standards for capital, liquidity, governance, affiliate transactions and operational independence, regardless of the parent company’s size or reputation.