Industrial loan company

An industrial loan company (ILC) or industrial bank is a financial institution in the United States that lends money, and may be owned by non-financial institutions. They provide niche financial services nationwide. ILCs offer FDIC-insured deposits and are subject to FDIC and state regulator oversight.

All “FDIC-insured entities are subject to Sections 23A and 23B of the Federal Reserve Act, which limits bank transactions with affiliates, including the non-bank parent company.” ( ILCs are permitted to have branches in multiple states (which is permitted by many states on a reciprocal basis). They are regulated and supervised by state-charters and insured by the Federal Deposit Insurance Corporation. They are authorized to make consumer and commercial loans and accept federally insured deposits. Banks may not accept demand deposits if the bank has total assets greater than $100 million. ILCs are exempted from the Bank Holding Company Act.

ILCs assist numerous charities and provide millions of dollars annually in grants, low interest loans, and service through the Community Reinvestment Act (CRA). Currently, only seven states offer an ILC bank charter. Most ILCs have been chartered by the Utah Department of Financial Institutions. Other states permitting ILCs include California, Colorado, Minnesota, Indiana, Hawaii, and Nevada.

2018 Report on performance of Industrial Loan Corporations.

US Industrial Banks Assets as of June 30, 2018 [1]
Balboa Thrift and Loan Association 284,487,000
Beal Bank USA 683,563,000
BMW Bank of North America 9,996,155,000
Celtic Bank 773,453,000
Comenity Capital Bank 8,624,574,000
Community Commerce Bank 234,119,000
Eaglemark Savings 41,610,000
EnerBank USA 1,612,407,000
Finance Factors, Ltd 572,188,000
First Electronic Bank 23,789,000
LCA Bank Corporation 175,556,000
Medallion Bank 1,067,904,000
Merrick Bank 3,472,389,000
Minnesota First Credit and Savings 27,243,000
Optum Bank, Inc 8,737,662,000
Pitney Bowes Bank, Inc . 710,268,000
Rancho Santa Fe Thrift and Loan 74,420,000
Sallie Mae Bank 24,054,263,000
Toyota Financial Savings Bank 920,495,000
The Morris Plan Company of Terre Haute 75,005,000
UBS Bank USA 54,066,956,000
USAA Savings Bank 1,770,200,000
WebBank 725,896,000
WEX Bank 2,860,268,000

Origins of the concept

In 1910, attorney Arthur J. Morris (1881-1973) opened the Fidelity Savings and Trust Company in Norfolk, Virginia, which made small loans to working people under a concept he called the “Morris Plan.” Under this lending approach, would-be borrowers had to submit references from two people of like character and earning-power to prove the borrower’s creditworthiness, and agreed to repay the loan through the purchase of Installment Thrift Certificates in weekly installments equal to the face value of the loan, less origination and investigative fees.[dubious – discuss] Morris Plan Banks expanded to more than 100 locations in the United States.

Morris Plan banks pioneered the use of automotive financing (through arrangements between the Morris Plan Company of America, essentially a holding company for Morris Plan banks, and the Studebaker Corporation), and, through the subsidiary Morris Plan Insurance Society, credit life insurance (which provided for the loan to be repaid in case the borrower died during the term of the loan, with any residue going to the borrower’s estate).


  1. ^FDIC Call Reports
  • Citing Risks, U.S. Seeks New Rules for Niche Banks New York TimesSeptember 16, 2009
  • Bank On It – Thanks to luck and a loophole, Utah is an unlikely hub for the nation’s industrial banks Salt Lake City WeeklyApril 22, 2015

Ofer Abarbanel online library

Ofer Abarbanel online library

Ofer Abarbanel online library