The FDIC has approved two deposit insurance applications submitted by automobile manufacturers Ford and GM to establish industrial banks, according to an agency statement.
Ford will establish Ford Credit Bank and GM will launch GM Financial Bank. Both institutions will be based in Salt Lake City and focus on providing automotive financing products nationwide, primarily through the purchase of retail installment sales contracts from independent dealers, the FDIC said.
Both banks will be required to maintain a minimum 15% tier 1 leverage ratio, and the parent companies will be required to support each bank’s capital and liquidity positions, the agency said.
Both companies previously sought deposit insurance applications. Biden administration officials were reluctant to grant them and instead proposed a rule to tighten industrial bank applications, which was not finalized.
