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Both the Blue Cross Blue Shield Assn. and UnitedHealth Group Inc. chose Utah as the home for their banks because the state, says a BCBS spokesman, has a "friendly environment" for establishing banks not owned by financial institutions.
Utah is the most popular of seven states that charter industrial loan corporations. The other states that charter ILCs are California, Colorado, Minnesota, Indiana, Hawaii and Nevada.
Utah has "a good, talented workforce," said John Prince, chief executive officer of Exante Financial Services, which operates UnitedHealth's bank.
While Exante is an industrial loan corporation, the BCBS Assn.'s Blue Healthcare Bank is a federal savings bank. A spokesman said the association originally applied for an ILC, a financial institution that lends money and may be owned by nonfinancial institutions, but opted instead to apply to the U.S. Treasury Department's Office of Thrift Supervision to open a federal savings bank.
The association did so following a moratorium on new ILCs by the Federal Deposit Insurance Corp. in response to a controversial request by Wal-Mart Stores Inc. to open a bank in Utah.
Insurers began opening banks following passage of the Gramm-Leach-Bliley Act of 1999 that repealed a law that had barred insurers from banking.
Metropolitan Life Insurance Co. of New York; State Farm Group of Bloomington, Ill.; the National Assn. of Mutual Insurance Cos. in Indianapolis; and the Independent Insurance Agents and Brokers of America of Alexandria, Va. also own banks.