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. Industrial banks are not allowed to accept demand deposits if they have 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.
U.S. Industrial Banks Total Assets as of December 31, 2025 (Figures in USD)Federal Financial Institutions Examination Council Central Data Repository's Public Data Distribution, Call Reports Balboa Thrift and Loan Association 409,500 Beal Bank USA 14,512,815 BMW Bank of North America 12,814,515 Celtic Bank 4,792,448 Comenity Capital Bank 13,626,906 Community Commerce Bank 411,498 Eaglemark Savings 743,751 Finance Factors, Ltd 687,876 First Electronic Bank 482,435Hatch Bank182,299 Milestone Bank (formerly LCA Bank Corporation) 374,567 Medallion Bank 2,620,589 Merrick Bank 9,251,625 Minnesota First Credit and Savings 28,940Nelnet Bank2,069,700 Optum Bank, Inc 20,824,000 Pitney Bowes Bank, Inc. 805,554 Sallie Mae Bank 29,734,290Square Financial Services1,694,247 Toyota Financial Savings Bank 15,431,880 UBS Bank USA 119,317,920 WebBank 2,940,956 WEX Bank 8,449,841
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. 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).
References
Citing Risks, U.S. Seeks New Rules for Niche Banks New York Times September 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 Weekly April 22, 2015
External links Financial Reports of Industrial Loan Companies. iBanknet.com - List of largest Industrial loan companies FDIC: Advisory Committee on Industrial loan companies June 8, 2004 The FDIC's Supervision of Industrial Loan Companies: A Historical Perspective. June 25, 2004 Industrial Loan Companies Come Out of the Shadows. Federal Reserve Bank of St. Louis July 2007 INDUSTRIAL LOAN CORPORATIONS: Recent Asset Growth and Commercial Interest Highlight Differences in Regulatory Authority. United States Government Accountability Office (GAO).