FDIC Approves Thrivent Financial ILC Charter, First in Four Years

On June 14, 2024, the FDIC granted an industrial loan company charter to Thrivent Financial for Lutherans, marking the first ILC approval in four years. Thrivent had filed its application in February 2021, and the Utah Department of Financial Institutions had already issued conditional approval. The new entity, Thrivent Bank, will be headquartered in Salt Lake City and will incorporate the existing Thrivent Federal Credit Union through a merger.

The ILC structure allows Thrivent's non-bank parent to operate a deposit-taking institution without being subject to full Bank Holding Company regulations, a framework that Utah facilitates for the majority of ILC assets nationwide. This approval is significant for the BaaS and embedded finance landscape as it signals the FDIC's continued, if slow, willingness to grant ILC charters. The decision drew attention given ongoing criticism from groups like the Independent Community Bankers of America, who oppose non-bank entities gaining banking privileges through the ILC route.