in the twentieth century to make small loans to industrial workers. as insured banks, ilcs are supervised by the fdic as well as by the chartering state. however, under a special exemption in current law, any type of company, including a commercial or retail firm, may acquire an ilc in a handful of states - principally utah, california, and nevada - and avoid the activity restrictions and supervisory requirements imposed on bank holding companies under the federal bhc act. when the special exemption for ilcs was initially granted in 1987, ilcs were mostly small, local institutions that did not offer demand deposits or other types of checking accounts. in light of these facts, congress conditioned the exemption on a requirement that any ilcs chartered after 1987 remain small ( below $ 100 million in assets ) or refrain from offering demand deposits that are withdrawable by check or similar means. this special exemption has been aggressively exploited since 1987. some grandfathered states have allowed their ilcs to exercise many of the same powers as commercial banks and have begun to charter new ilcs. today, several ilcs are owned by large, internationally active financial or commercial firms. in addition, a number of ilcs themselves have grown large, with one holding more than $ 50 billion in deposits and an additional eight holding more than $ 1 billion in deposits. affirmatively granting ilcs the ability to offer business now accounts and open de novo branches across state lines would permit ilcs to become the functional equivalent of full - service insured banks and operate across the united states. this result would be inconsistent with both the historical functions of ilcs and the terms of their special exemption in current law. because the parent companies of exempt ilcs are not subject to the bhc act, authorizing ilcs to operate essentially as full - service banks would create an unlevel competitive playing field among banking organizations and undermine the framework congress has established for the corporate owners of full - service banks. it would allow firms that are not subject to the consolidated supervisory framework of the bhc act - including consolidated capital, examination, and reporting requirements to own and control the functional equivalent of a full - service bank. it also would allow a foreign bank to acquire control of the equivalent of a full - service insured bank without meeting the requirement under the bhc act that the foreign bank be subject to comprehensive supervision on a consolidated basis in its home country. in addition, it would allow financial firms to acquire the equivalent of a full - service bank without

net between november and january and rebounded partially in february. the lengthy government shutdown likely contributed to the january decline. and although recent readings are below those that prevailed for much of 2018, they are still in a range consistent with ongoing spending growth. other spending indicators have also shown some slowing. residential construction data have been soft for some time, reflecting in part earlier increases in interest rates, and homebuilders report that supply constraints on available lots, shortages of skilled workers, and tariffs on inputs are also contributing to the slowdown. business investment registered strong gains last year, including in the latest quarter, but there are some indications of softening there as well. the latest data on capital goods orders, for example, suggest some softening in equipment spending gains. surveys of businesses, such as the institute for supply management ’ s purchasing managers index and similar regional indexes, have generally moved lower over the past six months, reversing much of the run - up seen in 2017 and late 2016. the national federation of independent business ’ s small business optimism index is also lower than its mid - 2018 peak, although it remains well above the levels of 2015 and much of 2016. the weaker foreign outlook also acts as a crosscurrent to the modal outlook. while strong foreign growth provided tailwinds early last year, foreign growth - 3projections have been revised down repeatedly more recently. 2 the slowdown of foreign growth now appears to be more persistent than initially assumed, with growth likely running below potential for most of last year. economic activity slowed noticeably in the second half of 2018 in china, where policymakers have been trying to achieve a balance between restraining very elevated levels of domestic debt, on the one hand, and maintaining strong aggregate growth, on the other. the protracted trade conflict with the united states has further complicated that challenge. concerns about china ’ s slowdown are reverberating globally, as was true in 2015 - 16, although the incidence is somewhat different. while germany had appeared to be weighed down primarily by transitory factors late last year, some of the weakness in industrial production now appears likely to be more persistent, in part reflecting spillovers from china. the euro area is also seeing slowing in some other large member economies. global weakness in trade and manufacturing has also weighed on japan. the slowdown in foreign demand spills over into the united states through a variety of channels. although the dollar has weakened somewhat lately, its earlier appreciation and