This bill tightens federal oversight of industrial banks—non-bank financial companies that accept deposits insured by the Federal Deposit Insurance Corporation (FDIC). The legislation closes a regulatory gap by requiring stricter approval processes for industrial banks seeking FDIC deposit insurance and expanding supervisory authority over their parent companies. Specifically, any pending deposit insurance applications from industrial banks submitted before September 23, 2021, must go through a 90-day public comment period and hearing, and the FDIC Board must approve them by a two-thirds vote or they automatically deny by September 30, 2026. The bill also grants the FDIC examination and enforcement powers over parent companies of industrial banks approved for deposit insurance after September 23, 2021, allowing regulators to conduct financial reviews and restrict risky transactions between parent companies and their banking subsidiaries. Additionally, the legislation makes it harder for ownership changes of industrial banks to occur without regulatory approval, except in limited circumstances involving banks in danger of default or publicly traded companies. The bill contains no specific funding authorization or implementation costs.
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