Rakuten Inc. intends to secure an industrial-loan company license in the U.S. to offer loans, credit cards and other financial services to its existing U.S. cashback-shopping business customers, The Wall Street Journal reported.
As an industrial-loan company, Rakuten would be able to operate banks without being subject to the Federal Reserve's oversight, according to the report. The planned operation will be in Utah, and Lee Carter, Rakuten's head of banking development, already discussed the plan with the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions.
Rakuten could face regulatory headwinds due to its foreign ownership and technology focus, with the Journal reporting that bankers have asked regulators to closely review the plan.
Walmart Inc. applied for a similar banking charter in 2005 but withdrew its application in 2007 after opposition from small banks. Square Inc. announced plans to open an industrial-loan company in Utah in 2017 but has still not secured regulatory approval.