ICBA and the Bank Policy Institute sent a letter to the FDIC voicing opposition to Flexible Finance, Inc.’s application on behalf of its proposed Utah industrial bank, Flex Bank, for Federal Deposit Insurance Corporation insurance. ICBA and BPI said that if granted insurance, Flex Bank could pose a significant and unnecessary risk to the Deposit Insurance Fund and the broader financial system.

By exploiting the ILC loophole to avoid consolidated Federal Reserve supervision, relying heavily on its nonbank parent for core operations, and introducing potential conflicts of interest in offering lending and other products to its parent’s existing customer base, ICBA and BPI said this application fails to satisfy key statutory factors under the Federal Deposit Insurance Act.