Detroit’s Bank Heist: Ford and GM Win FDIC Nod to Capture Deposits

In a pivotal regulatory shift, the Federal Deposit Insurance Corporation on January 22, 2026, approved deposit insurance applications from Ford Motor Company and General Motors Company, paving the way for the automakers to launch their own industrial banks in Utah. Ford Credit Bank and GM Financial Bank, both chartered in Salt Lake City, will focus on automotive financing while accepting FDIC-insured deposits up to $250,000 per account, marking a rare breach in the traditional separation of commerce and banking. The approvals, conditional on establishing operations within 12 months, come after years of applications and regulatory hurdles.

The FDIC evaluated the proposals under seven statutory factors, including financial history, capital structure, earnings prospects, management fitness, risk to the Deposit Insurance Fund, community needs, and consistency with federal deposit insurance purposes. “FDIC staff found that Ford Credit Bank satisfied the statutory factors for approval, subject to certain conditions and written agreements,” the agency stated in its press release.

Both banks must maintain a minimum 15% Tier 1 leverage ratio, with parent companies Ford and GM required to bolster capital and liquidity.

Unlocking Cheaper Funding in a Tough Market

Ford Credit Bank’s model centers on purchasing retail installment sales contracts from independent Ford dealers nationwide, funded mainly by retail savings accounts and time deposits via website and mobile app. GM Financial Bank mirrors this, acquiring contracts from GM Financial while building deposits digitally. Ford described the venture as a “long-term strategic initiative that will expand our capabilities, enabling us to offer additional savings options to customers,” according to its website, as reported by Reuters. The banks aim to launch high-yield savings and certificates of deposit, potentially tied to vehicle loyalty rates for future purchases.

This access to low-cost deposits reduces reliance on volatile wholesale markets and securitizations, critical as auto demand cools and financing bolsters profitability. Average U.S. vehicle transaction prices hover near $50,000, with nearly half of loans stretching beyond six years, per LendingTree data cited in The Detroit News. Ford Executive Chairman Bill Ford emphasized affordability as a core internal focus at the Detroit Auto Show.

Years of Regulatory Battles Reach Payoff

GM first applied in December 2020, seeking to reclaim banking roots lost when it divested GMAC post-2008 crisis. Ford followed in July 2022 with a 440-page pitch tying the bank to electric vehicle financing. Setbacks abounded: GM withdrew its initial bid in June 2024 amid FDIC concerns over community reinvestment and capital. A late-2025 FDIC policy shift favored limited-purpose industrial loan companies (ILCs), enabling approvals, as detailed in FinancialContent.

Industrial banks, numbering about two dozen nationwide per FDIC data, sidestep Bank Holding Company Act rules by avoiding demand deposits, evading Federal Reserve oversight on parents. Utah’s pro-business environment, with its fintech talent and tax perks, draws such charters. Ford Credit CEO Cathy O’Callaghan noted, “An industrial bank is a specialized financial institution that allows Ford Credit to offer diverse banking services, most notably the ability to accept insured deposits to fund our operations,” per American Banker. GM Financial President Bill Donnelly added, “Our primary focus at GM Financial Bank will be to offer beneficial, auto finance-focused banking products and services.”

Bankers Cry Foul Over ‘Loophole’

Traditional banks decried the move as regulatory arbitrage. Independent Community Bankers of America (ICBA) President Rebeca Romero Rainey warned, “When massive commercial-financial conglomerates exploit the ILC loophole, they inject unnecessary systemic risk into the banking system,” urging the FDIC to reject such bids that “blur the line between banking and commerce.” The group argued in 2022 that Ford’s application would “skirt regulatory oversight and violate longstanding U.S. policy separating banking and commerce,” as quoted in Reuters.

Opposition proved muted amid industry distractions like crypto, debanking probes, and credit card rate cap proposals. Columbia’s Todd Baker observed, “The issue of the industrial bank loophole continues to be a live one, although other, more pressing, concerns have taken precedence.” Proponents, including the National Association of Industrial Bankers (NAIB), cheered: Executive Director Frank Pignanelli said, “The FDIC’s action will enable these bedrock companies to bring increased access to regulated banking services to millions of American consumers,” via the NAIB site.

Utah’s Magnetism and EV Funding Edge

Utah Governor Spencer Cox hailed the approvals on X, crediting the state’s “incredible concentration of banking talent, our culture of financial innovation, and a reputation for firm but fair supervision.” Ford Credit Bank President Frank Stepan told The Detroit News, “Ford is good at what they do. We’re hoping that our bank will be the same… We want to strengthen relationships with customers through our bank.”

The charters position Ford and GM to fund EV infrastructure, chargers, and software upgrades cheaply, aiding the electrification push. By integrating finance into connected vehicles for subscriptions and payments, they challenge rivals like Ally Financial. ICBA posted on X, “The ILC loophole leaves dangerous gaps in safety and soundness oversight,” linking to its stability concerns.

Risk, Reward and the Road Ahead

While ILCs boast strong records in consumer lending, critics fear broader adoption by retailers or tech giants like Amazon. FDIC Chair Travis Hill oversaw the nod, signaling openness under current policy. Ford Authority reported on X the four-year wait ending in conditional approval. As automakers evolve into fin-tech hybrids, the approvals test post-1956 banking walls, promising cheaper loans but sparking oversight debates.