ICBA, State Groups Urge FDIC to Reconsider Edward Jones Industrial Loan Company Approval

Washington, D.C. (April 7, 2026) - The Independent Community Bankers of America (ICBA) and 38 state banking associations urged the Federal Deposit Insurance Corporation to reconsider its decision to approve Edward Jones's deposit insurance application to form a Utah-chartered industrial loan company.

In a letter to the FDIC, ICBA and the state banking groups cited Edward Jones's extensive network of more than 16,000 physical locations across North America, which could function as de facto bank branches for deposit-gathering activities. This would allow Edward Jones to siphon deposits away from local community banks - curtailing community bank lending capacity - while permitting the investment firm to avoid key regulatory requirements, including the Community Reinvestment Act and holding company supervision by the Federal Reserve.

"Community banks hold a disproportionate share of small business and agricultural loans, fostering economic growth and stability at the grassroots level," the groups said. "However, the approval of Edward Jones's ILC charter threatens to undermine this vital role by creating an uneven playing field that favors non-traditional financial entities over regulated community banks."

A loophole in the Bank Holding Company Act allows nonbank companies to own or acquire ILCs chartered in a handful of states without being subject to federal consolidated supervision, leaving a dangerous gap in safety and soundness oversight and introducing unnecessary systemic risk into the banking system. In a recent white paper, ICBA details why Congress should close the ILC loophole and the FDIC should delay final decisions on pending ILC deposit insurance applications until all stakeholder feedback is fully incorporated.

ICBA has repeatedly urged the FDIC to pause consideration of pending ILC applications until it has issued rules or otherwise provided greater transparency on ILC filings. ICBA also has called on the agency to reject applications of ILCs that pose undue risks to the Deposit Insurance Fund and that fail to serve the convenience and needs of their communities.

ICBA continues to strongly support the Close the Shadow Banking Loophole Act introduced by Senate Banking Committee members John Kennedy (R-La.) and Andy Kim (D-N.J.) to close the ILC loophole to mitigate risks to consumer privacy, the financial system, and the economy. ICBA and community bankers will continue working with policymakers to advance this much-needed legislation to preserve the separation of banking and commerce and ensure any company that wishes to own a full-service bank is subject to the same rules.

About ICBA

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation's community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America's community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers' financial goals and dreams. For more information, visit ICBA's website at icba.org.