Industrial Banks


Industrial banks, also known as state-chartered industrial loan companies (ILCs), were first formed in the early part of the 20th century to make consumer loans and offer deposit accounts as part of a move to secure credit for low- and moderate-income workers. Their growth was initially spurred by a 1987 federal banking law modification that gave nonbanking companies a way to own FDIC-insured industrial banks. ILCs have broad banking powers and may be owned by banks and other financial services businesses such as finance companies, credit card issuers and securities firms as well as by nonfinancial businesses such as automakers and department stores. Some regulators oppose the access to the financial services industry that ILCs provide to nonbanks. In 2003 California and Colorado passed laws that prohibit nonfinancial firms from owning ILCs. There are about five dozen FDIC-insured ILCs, mostly headquartered in Utah and California. Five other states—Colorado, Minnesota, Indiana, Hawaii and Nevada—permit these charters. In 2011 the top 10 industrial banks had total assets of $134 billion.



Rank Institution Parent Institution assets
1 American Express Centurion Bank American Express Company $35,152,624
2 UBS Bank USA UBS AG 34,276,023
3 USAA Savings Bank USAA Insurance Group 15,279,530
4 GE Capital Bank General Electric Company 12,338,838
5 BMW Bank of North America BMW of North America, LLC 9,024,032
6 Sallie Mae Bank SLM Corporation 7,613,991
7 CapitalSource Bank CapitalSource Inc. 6,783,598
8 Capmark Bank KKR Millennium Fund L.P. 6,164,409
9 Beal Bank USA Beal Financial Corporation 5,722,272
10 OptumHealth Bank, Inc. UnitedHealth Group Incorporated 1,885,125

Source: SNL Financial LC.

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  • A wide variety of firms own industrial banks. Such diverse firms as American Express (a financial services firm), USAA (an insurer) and BMW (an automaker) are among the owners of the largest institutions.