Bair sees ILC decision in January

Oct. 17, 2006—FDIC Chairman Sheila Bair said yesterday that she hopes to decide on pending industrial loan company applications by the end of next January, when the current moratorium on new ILC charters and acquisitions ends, according to newswire reports.

Bair, at a banking conference, said FDIC staff were asked for several options for the FDIC Board to consider, the reports said. She was quoted stating that most ILC applicants will have “a good idea” of their status by the end of January. At the same time, she said FDIC won’t rush its decision in order to protect some of the applications.

FDIC this summer set a moratorium on new ILCs while the agency considers systemic risk and ILC structural issues.

NAFCU, in a comment letter, said ILCs should be regulated to address safety and soundness. It added that the entities should be regulated to the same degree as other federally insured institutions, including credit unions, to avoid placing others at a disadvantage.

Banking trades, stating that new ILCs would add supervisory challenges to FDIC and increase risk to the banking system, recommended that the moratorium be made permanent.