July 3 — Nelnet has announced it has filed an application with the FDIC and the Utah Department of Financial Institutions to establish Nelnet Bank, a Utah-chartered industrial bank. If the charter is granted, Nelnet Bank would operate as an internet bank franchise with a home office in Salt Lake City. Nelnet Bank would be a separate subsidiary of Nelnet, and the industrial bank charter would allow the company to maintain its other diversified business offerings.
Nelnet has a long history helping families plan and pay for their education, including more than 30 years of making private student loans. If the charter is granted, the company’s bank subsidiary would offer a financially secure and FDIC-insured lender to the private student loan marketplace. With diversified sources of funding that include deposits and securitizations, Nelnet Bank would act as a source of funding for creditworthy, education-seeking consumers throughout all credit markets.
“There is a growing need for experienced, financially strong lenders that can help students and families make informed education financing decisions throughout their lives,” said Nelnet President Tim Tewes. “When in-school borrowers exhaust their federal student loan options, they need alternative sources of funding with affordable interest rates. Nelnet’s decades of experience as a lender and focus on superior customer service make us an ideal candidate to satisfy this need and bring new solutions to borrowers funding their education.”
Nelnet has hired Andrea Moss to lead the application process, and then Nelnet Bank if the charter is granted. Moss previously served as president of Columbus, Ohio-based Comenity Capital Bank and has more than 26 years of experience in the financial services industry, with expertise in executive leadership, strategy, risk mitigation and operations.
The charter application process is expected to take an extended period of time.