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BMW Bank of North America, Inc. (BMW)

IN RE: BMW Bank of North America, Inc. (BMW)
Salt Lake City, Salt Lake County, Utah
Application for Federal Deposit Insurance (Bank Insurance Fund)

ORDER

The undersigned, acting under delegated authority, has fully considered all relevant facts and information relating to the factors of Section 6 of the Federal Deposit Insurance Act regarding the application for federal deposit insurance for BMW, a proposed new Utah industrial loan company to be located at 2735 East Parleys Way, Suite 301, Salt Lake City, Salt Lake County, Utah, and has concluded that the application should be approved.

Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement, that the application submitted by BMW for federal deposit insurance be and the same hereby is approved subject to the following conditions:

1. That beginning paid-in capital funds of not less than $81,000,000 be provided, and that a ratio of Tier 1 Leverage Capital to total assets of not less than eight percent shall be maintained throughout the first three years of operation;

2. That any changes in proposed management or proposed ownership (10 percent or more of stock), including new acquisitions of or subscriptions to 10 percent or more of stock, will render this commitment null and void unless such proposal is approved by the Regional Director of the FDIC's San Francisco Regional Office (Regional Director) prior to opening of the bank;

3. That BMW obtain an audit of financial statements by an independent public accountant annually for at least the first three years after deposit insurance is effective, furnish a copy of any reports by the independent auditor (including any management letters) to the appropriate FDIC Regional Director within 15 days after their receipt by the bank and notify the appropriate FDIC Regional Director within 15 days when a change in its independent auditor occurs;

4. That adequate blanket bond coverage be obtained;

5. That an accrual accounting system be adopted for maintaining the bank's books;

6. That federal deposit insurance shall not become effective unless and until the applicant has been established as a state bank (not a member of the Federal Reserve System), that it has authority to conduct a banking business, and that its establishment and operation as a bank have been fully approved by the appropriate State Authority;

7. That, prior to opening for business, BMW will have a program in place to assure that its electronic information systems are able to correctly perform all automated processing operations, including interactions and interdependencies with other automated systems, involving dates later than December 31, 1999, consistent with the standards and guidance provided by the Federal Financial Institutions Examination Council.

8. That until the conditional commitment herein granted becomes effective, the FDIC shall have the right to alter, suspend or withdraw said commitment should any interim development be deemed to warrant such action; and

9. That if federal deposit insurance has not become effective within twelve months from the date of this ORDER, or unless, in the meantime, a request for an extension of time has been approved by the FDIC, the consent granted herein shall expire at the end of the said twelve-month period.

Dated at Washington, D.C. this day of August, 1999.

FEDERAL DEPOSIT INSURANCE CORPORATION

By________________________________
Mark S. Schmidt
Associate Director
Division of Supervision


FEDERAL DEPOSIT INSURANCE CORPORATION

IN RE: BMW Bank of North America, Inc. (BMW)
Salt Lake City, Salt Lake County, Utah
Application for Federal Deposit Insurance (Bank Insurance Fund)

STATEMENT

Pursuant to the provisions of Section 5 of the Federal Deposit Insurance Act (12 U.S.C. ? 1815), an application for federal deposit insurance has been filed for BMW, a proposed new Utah industrial loan company, to be located at 2735 East Parleys Way, Suite 301, Salt Lake City, Salt Lake County, Utah.

The applicant's ultimate parent is Bayerische Motoren Werke, AG, the maker of BMW, Rover, MG, and Mini automobiles, BMW motorcycles, and BMW Rolls-Royce jet aircraft engines. In 1998, the parent company employed approximately 120,000 workers and produced an estimated 1,200,000 automobiles and 60,000 motorcycles.

The proposed institution will provide financing for the purchase of new and used BMW and Rover autos, and BMW motorcycles and will primarily make contact with customers over the Internet. The proposed institution will have almost no direct contact with the public. The proposed new industrial loan company will operate from one location and will not offer any lobby, walk-up, or drive-up services. Time and savings deposits will be offered to BMW owners and dealers. The institution intends to offer an affinity credit card.

For the purposes of this proposal, the investment in fixed assets is reasonable, capital is adequate, projections for future earnings prospects are favorable, and management is considered satisfactory. Corporate powers to be exercised are consistent with the porpoise of the Federal Deposit Insurance Act. No formal objections to this proposal have been filed and no undue risk to the insurance fund is apparent.

Accordingly, based upon careful evaluation of all available facts and information, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted.

ASSOCIATE DIRECTOR
DIVISION OF SUPERVISION



Last Updated 03/24/2011 Legal@fdic.gov