Japanese Retail Giant Applies for Banking Charter

Rakuten, the largest e-commerce company in Japan, today filed an application for an industrial loan company charter in the state of Utah. The company—known as the “Amazon of Japan”—operates several consumer-facing retail and fintech businesses, including the U.S. rewards brand Ebates.

While the American Bankers Association remains a strong proponent of charter choice and generally does not comment on individual charter applications, the association expressed serious concerns about the implications of a large technology company obtaining a banking charter. “As Japan’s largest e-commerce site, Rakuten is a major technology firm engaged primarily in non-financial activities,” said ABA President and CEO Rob Nichols. “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.”

Nichols called 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.”