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ABA Statement on Rakuten ILC Charter Application

“ABA has long been a strong advocate for new bank formation, and we view the diversity of bank charters in this country as a sign of the strength and depth of the industry. Indeed, our members include banks of all sizes and charters. With that in mind, we have serious concerns with Rakuten’s application for an Industrial Loan Company charter. As Japan’s largest e-commerce site, Rakuten is a major technology firm engaged primarily in non-financial activities. Allowing Rakuten to participate in banking activities would raise important questions about the free flow of credit, consumer privacy and possible conflicts of interest— questions not raised by current ILC charter holders.

“We look forward to learning more details and discussing the implications of this application with our members, including what it means for public confidence in the banking system. In the meantime, we call on the FDIC to rigorously review every aspect of the application to see if it meets the relevant requirements for this charter, including community need, keeping in mind the broad commercial rather than financial nature of Rakuten’s business and the significant questions that raises.”

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $18 trillion banking industry, which is composed of small, regional and large banks. Together, America’s banks employ more than 2 million men and women, safeguard $14 trillion in deposits and extend more than $10 trillion in loans.

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