TCF Bank is buying a California-based company that finances used car loans.
TCF isn't saying what it will pay for Gateway One Lending & Finance, but the deal is part of TCF's plan to diversify its business and find new revenue sources.
"It's a business that has held up very well through the financial crisis. Automobiles are things that people have to have today to get by in life," said Bill Cooper, TCF CEO. "It's a huge market and it's a segment of the business we haven't been in the past. So, we think it's an excellent place to start."
Gateway makes loans through some 3,100 car dealers in 30 states. So far this year, Gateway has made about $200 million from car loans. Cooper says the car finance company will be integrated and that TCF bank offices will offer car loans in about six months.
"We will also be offering car loans in our branches, the same way we do mortgage loans today," he said.
TCF said it faces about a $50 million annual revenue loss due to federal caps on transaction fees charged to merchants who accept debit cards.