U.S. Congressional Hearing on Industrial Banks: Is Consolidated Supervision of Parent Companies by the Federal Reserve Needed?
An important issue raised by some commentators is whether the lack of consolidated supervision of the parent companies of industrial banks (IBs) by the Federal Reserve is serious enough to require new legislation, such as the Close the IB Loophole Act. To gain more information regarding this issue, the U.S. House of Representatives Subcommittee on Consumer Protection and Financial Institutions held a hearing on “Banking Innovation or Regulatory Evasion? Exploring Trends in Financial Institution Charters” on April 15, 2021. This was an important hearing and therefore the views expressed by those testifying merit further examination before reaching any definitive conclusions regarding the need for consolidated supervision by the Federal Reserve of parent company ownership of IBs.