Companies that have set up industrial banks include UBS, General Electric Co., General Motors, Merrill Lynch & Co. Inc., Morgan Stanley, American Express Co. Target Corp, Nordstrom, Harley-Davidson, First Data, UnitedHealth Group, BMW, and Sallie Mae. In May 2005, Warren Buffett's Berkshire Hathaway, Inc. announced plans to operate a Utah industrial bank to handle consumer loans for its R.C. Willey Home Furnishings stores. The Blue Cross and Blue Shield Association, automakers Ford Motor Co. and DaimlerChrysler AG, Ceridian Corp., Home Depot and DaimlerChrysler await approval.
Top Ten FDIC-Insured Industrial Banks by Assets, 2005 ($ millions)
|1||Merrill Lynch Bank USA||UT||$60,367.7|
|2||UBS Bank USA||UT||$18,585.8|
|3||American Express Centurion Bank||UT||$15,933.0|
|4||Fremont Investment & Loan||CA||$11,316.4|
|5||Morgan Stanley Bank||UT||$8,674.9|
|6||USAA Savings Bank||NV||$7,099.6|
|7||GMAC Commercial Mortgage Bank||UT||$4,872.5|
|8||GMAC Automotive Bank||UT||$2,429.5|
|9||Beal Savings Bank||NV||$2,420.2|
|10||Lehman Brothers Commercial Bank||UT||$2,127.2|
Source: Federal Deposit Insurance Corporation. However, the assets held by an ILC tend to paint an incomplete picture. The actual loan book amount can be considered more important. In this view, for example, UBS would replace Merrill Lynch as number 1.
Under this lending approach, would-be borrowers had to submit references from two people of like character and earnings power to guarantee 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 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 subsidairy Morris Plan Insurance Society, credit life insurance (as allowed for the loan to be repaid in case the borrower died during the term of the loan, with any residue going to the estate).