Payments provider PayPal (NASDAQ:PYPL) is pursuing a Utah-chartered industrial loan company. The company has submitted its application to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation.
An industrial bank charter is a state-issued license, primarily in Utah, allowing a financial institution to take deposits and make loans but can also enable non-financial companies to operate them. These state-chartered banks are FDIC-insured but offer unique structures for commercial ownership, attracting companies that want more control of their services.
If approved, PayPal Bank would enable PayPal to provide business lending solutions to small businesses in the U.S. more efficiently, while reducing reliance on third parties. PayPal Bank also intends to offer interest-bearing savings accounts to customers.
Since 2013, PayPal has provided access to more than $30 billion in loans and working capital to over 420,000 businesses.