GreatAmerica Leasing Corp., an Iowa-based equipment lender and periodic ABS issuer, is debating the launch of industrial loan company (ILC) subsidiary or a special bank, either of which could allow GreatAmerica a new avenue of funds, via cash deposits (CDs) insured by the Federal Deposit Insurance Corp.
The move is reminiscent of other finance companies that have opted for banking subsidiaries over the last couple of years to diversify funding. Several of these subsidiaries have been formed in Utah, which is one of several states that offer the ILC charter. For example, Volkswagen has an ILC set up in Utah, which the company announced in January, and will offer auto loans, as well as mortgage loans, to its customers. The bank will eventually offer Volkswagen and Audi credit cards, according to published reports.