The FDIC approved ICBA-opposed applications from Ford and General Motors to establish industrial loan companies.
Details: The FDIC said both banks will be based in Salt Lake City and:
-
The proposed business models for Ford Credit Bank and GM Financial Bank will focus on providing automotive financing products nationwide, primarily through the purchase of retail installment sales contracts.
-
Funding will primarily consist of savings accounts and time deposits via the banks’ websites and mobile applications.
-
Their approvals expire if Ford Credit Bank and GM Financial Bank are not established within 12 months.
ICBA View: In a national news release, ICBA expressed serious concern with the approvals, citing the systemic risk the ILC loophole poses to the banking system by allowing financial institutions to receive federal deposit insurance while avoiding full regulatory oversight.
Background: A loophole in the Bank Holding Company Act allows commercial and fintech companies to own or acquire ILCs chartered in a handful of states without being subject to federal consolidated supervision, leaving a dangerous gap in safety and soundness oversight and introducing unnecessary systemic risk into the banking system.
Recent ICBA Advocacy:
-
In a national news release in December, ICBA expressed opposition to PayPal’s application to form an ILC.
-
ICBA last fall published a white paper detailing why policymakers should close the ILC loophole, which allows ILCs and their parent companies to skirt regulatory oversight.
-
ICBA in September told the FDIC that it has a statutory duty to reject ILC applications that pose undue risks to the Deposit Insurance Fund and fail to serve the convenience and needs of their community.
-
In 2025, ICBA expressed opposition to several ILC applications, including from Nissan, Stellantis, and General Motors, and detailed the issue in an American Banker op-ed (subscription required).