Salt Lake City is the home for the nation’s first new industrial bank to open in 12 years. Nelnet Bank launched in early November to provide student loan refinancing, with plans to offer additional private loan options for students in 2021. Financial firm Nelnet Inc. has operated in the education-related loan industry since 1978 and will operate it new venture as an Internet bank franchise from a home office in Salt Lake City.
In March 2020, the Federal Deposit Insurance Corp. (FDIC) and the Utah Department of Financial Institutions conditionally approved an application from Nelnet Inc. for deposit insurance and a Utah state-chartered industrial bank, respectively, to create the new bank. Nelnet’s application was filed in November 2019.
Nelnet Bank’s primary focus is to help students and families develop healthy spending and saving habits and make well-informed decisions about loans when paying for education expenses, said Nelnet Bank CEO Andrea Moss. “When borrowers and their families exhaust their federal student loan options, Nelnet Bank will be a place they can turn to further fund their education,” she said. “At Nelnet Bank, our mission is to help families achieve their dreams with financial knowledge and access to education. Nelnet Bank will allow us to meet the changing and diverse needs of the higher education market.”
Initially available via web browser, Nelnet Bank will have mobile apps available through the iOS App Store and Google Play Store in the future. Nelnet Bank will leverage industry-leading cybersecurity practices to keep customers and their data safe, according to Moss.
“Launching Nelnet Bank is an exciting milestone for Nelnet with our deep educational experience serving families and schools,” said Tim Tewes, president of Nelnet. “Being the first industrial-chartered bank established since 2008 speaks to this experience as well as Nelnet’s financial strength and the strength of the bank's leadership team.”
Nelnet Bank was funded with an initial capital commitment of $100 million from Nelnet. Nelnet Bank will operate as a subsidiary of Nelnet Inc. and the industrial bank charter will allow the company to maintain its other diversified business offerings.
Nelnet Inc. is a diversified company focused on offering educational services, technology solutions, telecommunications and asset management. It specializes in student loan servicing, tuition payment processing and school administration software. The company also makes investments in real estate and early-stage and emerging growth companies.