Ford & General Motors Get FDIC Approval To Be Banks

Ford and General Motors have received FDIC approval to set up their own FDIC‑insured industrial banks, Ford Credit Bank and GM Financial Bank, both to be based in Utah and focused on auto financing funded by online deposits.

What exactly was approved?

• The FDIC Board approved deposit insurance applications for:

  • Ford: Ford Credit Bank, a Utah‑chartered industrial bank in Salt Lake City.​

  • GM: GM Financial Bank, also a Utah‑chartered industrial bank in Salt Lake City.​

• Both banks will be allowed to take FDIC‑insured deposits (e.g., savings accounts and time deposits) up to standard insurance limits.

• The approvals are conditional and require the banks to be formed and operating within 12 months, or the orders expire unless extended.

Why are Ford and GM doing this?

• The new banks give them a cheaper, more stable source of funding by taking insured deposits instead of relying only on wholesale funding and securitization markets.

• Lower funding costs can translate into more competitive auto loans and financing offers for car buyers and dealers.

• Each bank will specialize in:

  • Ford Credit Bank: buying retail installment sales contracts and leases from Ford/Lincoln dealers nationwide, funded by online savings and CDs.

  • GM Financial Bank: buying retail installment contracts from GM Financial, similarly funded by online savings and time deposits.

Key regulatory conditions and safeguards

• Both Ford Credit Bank and GM Financial Bank must:

  • Maintain at least a 15% tier 1 leverage ratio, which is a relatively high capital requirement meant to absorb losses.

  • Have their parent companies (Ford Motor Co. and General Motors Co.) commit to support the banks’ capital and liquidity.

• They are industrial banks (also called industrial loan companies), which:

  • Are supervised like other insured banks and must follow all applicable consumer protection and safety‑and‑soundness rules.

  • Can be owned by commercial firms without the parent becoming a bank holding company, something critics call a “regulatory loophole.”

Why this matters for consumers

If you finance or lease through Ford Credit or GM Financial:

• You may see:

  • Additional savings products (online savings, CDs) offered under the Ford or GM financial brands.

  • Potentially more competitive interest rates on auto loans over time, as deposit funding lowers their costs.

• Deposits at these banks will be FDIC‑insured up to standard limits (currently 250,000 dollars per depositor, per insured bank, per ownership category).

A simple example: a Ford customer could open an online savings account at Ford Credit Bank, earn interest with FDIC insurance, and Ford could then use those deposits to help fund loans and leases on Ford vehicles.