German auto manufacturer BMW has applied to the state of Utah for an industrial loan corporation charter with which it intends to launch BMW Bank of North America Inc., a national company that will offer an array of financial services to buyers of its high-end vehicles.
David W. Paul, vice president of business development for BMW Financial Services, said the bank will offer its customers a variety of services, including home equity loans, checking and savings accounts and possibly credit cards."We're considering that now," he said.
BMW Financial Services is based in Woodcliff Lake, N.J., where BMW of North America is headquartered. It serves as a financing arm for sales made by its dealers, similar to General Motors Acceptance Corp. or GMAC as it is better known. BMW also has a large telephone center in Columbus, Ohio.
BMW, an acronym for Bavarian Motor Works, also owns Land Rover, and that marque's customers also would have access to the new bank. About half of BMW and Land Rover buyers use BMW Financial Services to finance their vehicles. It currently has some $10 million in outstanding loans.
The firm has opened an office at 2735 East Parleys Way. Paul said he expects to get approval for the company's charter by summer and open for business in the fall.
There are currently some 20 financial services firms in Utah operating under an industrial loan charter.
"We chose Utah because it has nurtured these kind of non-bank banks, has a positive business and regulatory climate and supports this kind of business activity," said Paul, who also will serve as chairman of the board of the new bank.
He said the bank is a response to the rapid changes in the automobile industry, particularly in how vehicles are sold. The Internet is increasingly being used by people buying, selling and financing new and used cars. BMW Bank will also do business on the World Wide Web. Paul said the Internet will be the "heart" of its services.
"There are a large number of Internet players providing sales and financing of vehicles and also a large number of big national dealer corporations doing the same thing," said Paul.
"But consumers also want different kinds of financial services. This will allow us to respond to market changes and support our dealers in keeping the BMW customer in the family."