For the next 20 years, loans obtained by these workers were the largest source of credit for this segment of borrowers. The Industrial Bank Statement Savings Account is a decent savings account, as long as you have $100 to get started and qualify to waive the $3 monthly service fee. But if you want to earn a high interest rate, you’re better off looking at high-yield savings accounts at other banks or Industrial’s Kasasa accounts. An industrial bank operates much like other commercial banks; however, many limit the scope of their business to a narrower customer base, such as only offering auto loans or construction loans. Second, you have to meet certain qualifications to earn Kasasa perks, including high interest rates and cash back.
In addition, industrial banks do not face supervision by the Federal Reserve. As a result of this lack of regulatory restrictions, many financial technology companies and investment companies have started to apply for industrial bank charters. Originally, the purpose of an industrial loan company (or ILC) was to help industrial workers, usually employees of the same company, obtain banking services.
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- ILCs assist numerous charities and provide millions of dollars annually in grants, low interest loans, and service through the Community Reinvestment Act (CRA).
- You can receive your monthly statement by selecting one of the two safe and secure options.
- The bank offers a somewhat low opening minimum of $1,000, but its rates aren’t competitive.
- Their actions were motivated by a new wave of fintech companies, including payment processor Square Inc., that have submitted applications for state bank charters.
- Industrial Bank and Democracy Federal Credit Union have many of the same features, including Kasasa accounts.
Criticisms of industrial banks claim that they provide companies with the privileges, but not the supervision, of a bank charter. There is a history of racial prejudice in banking and lending that has significantly impacted Black Americans and contributed to a racial wealth gap in the US. Black-led financial institutions serve an integral role in providing services and products to Black communities. Money market accounts are similar to savings accounts, but the former usually gives you easier access to your money. The Industrial Bank Money Market Account comes with both a debit card and paper checks.
An industrial loan company (ILC) or https://1investing.in/ is a financial institution in the United States that lends money, and may be owned by non-financial institutions. ILCs offer FDIC-insured deposits and are subject to FDIC and state regulator oversight. 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.
How Industrial Bank Works
To join, you or a family member must live, work, study, or worship in select counties in Maryland, select counties in Virginia, or any part of Washington, DC. You may also join if you work for a Select Employer Group in Philadelphia. If you aren’t eligible to join, Industrial is the clear choice.
Kasasa Tunes
Most ILCs have been chartered by the Utah Department of Financial Institutions.[2] Other states permitting ILCs include California, Colorado, Minnesota, Indiana, Hawaii, and Nevada. Industrial Bank and Democracy Federal Credit Union have many of the same features, including Kasasa accounts. You might like Democracy FCU if you have your eye on Kasasa accounts, because its interest rates and cash-back perks are better. First, you must open one of the Kasasa checking accounts to qualify for Kasasa Saver. Kasasa accounts offer much better perks than the Industrial Bank Personal Checking Account or savings accounts.
Industrial Bank does not share your contact information with any third-party vendors.
An industrial bank is a state-chartered, financial institution, usually owned by a commercial firm, that is not regulated by a federal banking agency. Industrial banks accept customer deposits and provide loans for consumers and small businesses. For example, payment services provider Square Inc., in early 2021 completed the chartering process to form a new industrial bank, Square Financial Services in Utah. Square Financial Services’ goal is to offer direct business loans and deposit products to underserved populations.
A bank charter would allow Square Inc. to provide loans and other financial services directly to its merchants. However, ICBA claims that industrial bank charters are a loophole that Congress needs to address. There’s an overdraft fee of $35 for transactions, including checks, that would overdraw your account and a $25 fee for balances that stay overdrawn for seven consecutive business days. The bank provides a program for linked transfers from savings to checking accounts in the event of an overdraft, with a fee of $10. And the bank offers an overdraft line of credit, but the rate isn’t competitive.
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Industrial Bank is a Black-owned financial institution and designated as a minority depository institution by the FDIC. It has branches in Washington, DC, Maryland, New Jersey, and New York. An account for environmentally conscious customers who prefer paperless banking. Kasasa Protect is Industrial’s newest way to keep our customers safe from data breaches, credit card fraud and Identity theft. A perfect account for those account holders who maintain a higher daily balance and still want a flexable checking account. To be considered to start an industrial bank, the corporation must apply for a charter through a state that allows them.
The difference between industrial and commercial banks isn’t just in the structure, it also applies to their offerings. Industrial banks serve a different function from commercial banks. Many of these chose to base their original bank operations in Utah to take advantage of the state’s industrial bank charter and later transitioned to become a commercial banks. Over 93% of industrial banks have headquarters in Utah, a state known for its business-friendly policies. My banker at the Oxon Hill banking center helped me establish a Student Checking account, so now I can bank on the go.
Industrial offers a variety of services to complement your checking, savings, certificate of deposit account or loan to make banking a breeze. The bank’s branch network is limited to only a few locations around Washington, D.C., New York and New Jersey, but it does provide a digital experience via a website and mobile apps. The website is reasonably transparent about account rates and fees. Customer support has some phone hours on Saturday in addition to weekdays, but there is no Twitter or public-facing live chat on its website like some banks have.
Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. You may want to read online reviews or ask family and friends about their experiences with Industrial Bank. It’s also worth noting that Industrial doesn’t have any public controversies. Industrial Bank understands the rigorous financial pressures that many Non-Profit organizations face everyday. Start making sense of your small business’ financial statements with our latest interactive course.
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”. Download our Mobile App TODAY to avoid disruptions in accessing your account information via your mobile phone. With the Industrial Bank Mobile Banking App, you can check balances, make deposits, process transfers and pay bills whenever you want. Democracy is a credit union, so you have to become a member to use its banking services.