June 25, 2025
Acting Chairman Travis Hill
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429
Via email:
comments@fdic.gov
Doug Shulman, Chairman & CEO
OneMain Financial
601 N.W. Second Street
Evansville, IN 47708
Via email to Ryan Black:
ryan.black@omf.com
Re: National Community Reinvestment Coalition Opposition to Federal Deposit Insurance Application for OneMain Financial
Acting Chairman Hill and Mr. Shulman:
We appreciate the opportunity to comment on OneMain’s application for deposit insurance as part of its charter application to establish OneMain Bank. The National Community Reinvestment Coalition (NCRC) urges the FDIC to reject the OneMain Bank application for deposit insurance.
NCRC and its grassroots member organizations create opportunities for people to build wealth. We collaborate with community leaders, policymakers, and financial institutions to champion fairness and end discrimination in lending, housing, and business.
We call on the FDIC to reject this application. Granting deposit insurance to OneMain would create a dangerous mix of commerce and banking, would permit a charter to an entity that would not have a community reinvestment commitment commensurate with its national service area, and would pose a threat to the FDIC deposit insurance fund.
The industrial loan company charter framework creates a dangerous mix of commerce and banking.
If the ILC charter is granted to OneMain, the company will not be required to register as a bank holding company with the Federal Reserve Board and therefore will not be subject to regulation and supervision by the Federal Reserve Board.
As detailed in a White Paper by the Independent Community Bankers Association, ILCs “provide a loophole in the Bank Holding Company Act that allows commercial companies and fintech companies to own or acquire industrial loan companies (ILCs) chartered by Utah and a handful of other states without being subject to federal consolidated supervision, leaving a dangerous gap in safety and soundness oversight.”
The Bank Holding Company Act embodies the long-standing principle of separation of banking and commerce. Approximately 20 ILCs failed between 1990 and 2003. [i] During the financial crisis, several became insolvent and required interventions from the Targeted Asset Relief Program.[ii]
This application poses concerns for safety and soundness, and a risk to the FDIC Deposit Insurance Fund.
In the United States, bright lines have existed to separate banking from commerce. The industrial loan charter is a problematic contradiction to that principle. If OneMain receives an ILC charter, regulators will have little insight into its corporate parent’s operations even though they have many interdependent relationships.
The FDIC should be especially skeptical of industrial loan company charters in the high-risk consumer finance sector. OneMain Financial specializes in nonprime personal lending—providing installment loans to consumers who often cannot qualify through traditional banks. An ILC charter would allow OneMain to fund its lending operations with lower-cost, insured deposits instead of more expensive commercial funding or equity, significantly altering its risk profile. Nonprime lending is particularly sensitive to economic downturns, as borrowers in this segment are more likely to default during periods of financial stress. These dynamics create systemic vulnerabilities and raise fundamental questions about the safety and soundness of granting a bank charter to such a business model.
ILCs do not have community reinvestment commitments commensurate with their service area.
Industrial Loan Companies (ILCs) face minimal requirements under the Community Reinvestment Act (CRA), a key law designed to prevent redlining and promote community investment. If OneMain Financial receives an ILC charter, it would have limited CRA obligations despite being a large nationwide lender serving non-prime borrowers. OneMain’s CRA responsibilities would likely only cover areas near its wholly-owned industrial bank subsidiary located in West Valley City, Utah, not the 44 states where it actually makes loans. This mismatch is particularly concerning given OneMain’s business model, which involves high-cost, high-risk lending across the country. The narrow CRA coverage would allow OneMain to gain the benefits of a bank charter while avoiding the comprehensive community reinvestment duties that Congress intended for banks serving the public.
Granting an ILC charter to an irresponsible installment lender poses a risk of wide scale consumer harm without proper regulatory oversight.
OneMain Financial’s recent regulatory history reflects a pattern of conduct that makes it unfit for an ILC charter. In 2023, the CFPB fined OneMain $20 million for using deceptive practices and high-pressure tactics to steer customers into costly add-on products—harming tens of thousands of borrowers. This enforcement action is not merely about isolated misconduct. It points to deeper incentive problems and compliance failures within the firm’s retail lending model. OneMain also recently reached a settlement in the class action lawsuit Matuch v. OneMain, which involved allegations of unlawful debt collection practices in violation of consumer protection laws. Taken together, these actions reveal a troubling pattern of consumer harm rooted in fundamental compliance failures.
Regulators should not grant banking privileges to a company with ongoing enforcement actions and lawsuits that demonstrate inadequate internal controls and compliance culture.
Conclusion
For the reasons stated above, NCRC opposes OneMain Banks’s application for deposit insurance. We urge the FDIC to reject this application, which seeks the privilege of a bank charter that creates a dangerous mix of commerce and banking, would give a nonbank the benefit of a charter with only minimal requirements under the CRA, and would pose a threat to both consumers and to the FDIC Deposit Insurance Fund.
Thank you for your consideration.
Sincerely,
Jesse Van Tol
President and CEO
NCRC
[i] Arthur Wilmarth, “Beware the return of the ILC,” American Banker, August 2, 2017, https://www.americanbanker.com/opinion/beware-the-return-of-the-ilc.
[ii] Baird Webel and Bill Canis, TARP Assistance for the U.S. Motor Vehicle Industry: Unwinding the Government Stake in GMAC, September 13, 2012 (No. 7–5700; p. 16). Congressional Research Service. https://www.everycrsreport.com/files/20120913_R41846_e7676c5349186d9fbdbb960671742f3c80e07070.pdf.
