Big California retailer is starting up a bank
Buying a bank can be expensive. So maybe it's cheaper to start one of your own.
That is what California's McMahon Valley Stores found out. So the private company made an application for a bank to the Comptroller of the Currency last February. The application was recently approved, and by the end of the year the bank's first office will open in Carlsbad, Calif.
According to government officials, this is the first commercial bank charter issued to a nonfinancial institution. The new operation, called the Western Family Bank, will expand from its basic operation in Carlsbad to two more units in Colton and Fresno by mid-1983.
The McMahon company expects to help capitalize the bank with $3 million of its own funds. Added capital is expected to be forthcoming from the estimated 400,000 customers.
Under the new banking operations, the bank plans to finance auto loans, education requests, home improvements, and farm equipment needs. The McMahon Company will continue handling installment accounts for in-store purchases. It operates 72 stores in four states, Arizona, New Mexico, Nevada, and California. Because interstate banking is prohibited, the bank will be chartered at this time to operate only in California.