As reported in various press accounts, the Federal Deposit Insurance Corporation (the FDIC) granted a “conditional approval” for deposit insurance to permit Wellpoint Inc, a health insurer, to operate an industrial loan company. Such industrial loan company will operate as ARCUS Financial Bank and will have a Utah charter if approved by the Utah Department of Financial Institutions.
Approval of the application came after the Board of Governors of the Federal Reserve System (the Federal Reserve) informed the FDIC that, in its opinion, such approval would be in compliance with the Bank Holding Company Act. According to Reuters News Agency, the Federal Reserve determined that “Wellpoint’s disease management and mail-order pharmacy activities were complementary to the financial activity of underwriting and selling health insurance and are therefore permissible for a financial holding company.” Currently, the FDIC is operating under a moratorium whereby it is not acting on industrial loan company applications submitted by companies that are engaged in non-banking activities that are not permissible for a financial holding company. Notably, the only federal regulator of industrial loan companies is the FDIC.
The FDIC has not issued a press release as of today’s publication date in connection with this action.