Long-standing regulatory barriers prevent tech giants like Walmart, Google, and Tesla from owning banks. However, new opportunities through industrial loan companies might change this, bringing more choice but also more risk to the financial system.
Owning a US bank is hard — deliberately so. A long-standing belief that commerce and banking are best kept separate has spawned rules and hurdles that effectively prevent Walmart, Google or Tesla from taking deposits and making loans. But that could change. If it does, customers will get more choice and the financial system will get more risk. Simply put, a company that owns a bank must be regulated like a bank. But there is an exception.
For one, the FDIC is likely to pass from Democrat to Republican control. In the past, that has tended to mean a more pro-innovation approach. Tech disrupters are in the ascendant, politically. That could open the door to all kinds of new bank owners. Google parent Alphabet, Amazon.com or Meta Platforms might all see value in being able to amass data and wealth from their millions of US customers.
US Banking Tech Giants Industrial Loan Company Financial Regulation Risk Management
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