The unique structure of industrial loan corporations may offer a way for companies already working in environmental, social and governance activities to become more involved in the banking space.
AmeriNat Bank, which has submitted a de novo application in Nevada, will be an industrial banking unit of AmeriNational Community Services Inc., which provides mortgage loan servicing to governmental and nonprofit entities such as Habitat for Humanity and through channels such as Property Assessed Clean Energy programs.
Industrial banks provide the only opportunity for a commercial entity to operate a bank. Only a few states have issued them. AmeriNat will be the fifth industrial bank headquartered in Nevada, while 16 are headquartered in Utah, the most of any U.S. state. There are three headquartered in California, and one each in Hawaii, Indiana and Minnesota.
According to its application, AmeriNat Bank will offer Small Business Association loans "as a logical extension" of its current offerings, focused on its current client base. Areas of expertise include "economic development (job creation), green energy and affordable housing," according to the bank's application. "It is a nice opportunity to bring the existing services back under a banking umbrella," said Adrienne Thorson, CEO of the proposed bank.
AmeriNat has a large client book already through its mortgage loan servicing business. "The benefit is that they can come in and offer banking products and services to their customers," said Ray Specht, CEO of Specht Leadership and a consultant to the industrial loan corporation, or ILC, industry. Having the banking charter will provide it with "greater flexibility and efficiency" than its current structure, he said.
Specht added that ILCs such as AmeriNat would not compete directly with traditional banks. "You don't see industrial banks looking to open branches. ... They typically focus on their customer base and there really isn't a competition factor," he added.
Nevada is working to diversify its business strategy, and attracting banks under this charter type is a goal of economic development associations in the area, according to Kylie Rowe, vice president of economic development at the Las Vegas Global Economic Alliance.
"There were no new [industrial bank] charters for a really long time," said Rowe, but the new FDIC Chairwoman Jelena McWilliams has expressed openness to the charter type. "The opportunity is, now, to approve industrial loan corporations," said Rowe.
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