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Ford and General Motors have received approval from federal regulators to set up banks, in a sign of the Trump administration’s more permissive approach to financial oversight.
The Federal Deposit Insurance Corporation announced on Thursday it given the Detroit carmakers the go-ahead to set up Ford Credit Bank and GM Financial Bank, both of which will be chartered in the state of Utah.
The FDIC said the banks would “focus on providing automotive financing products throughout the US, primarily through the purchase of retail instalment sales contracts from independent Ford dealers”.
The banks will accept deposits insured by the FDIC, giving them access to lower-cost funds than a traditional financial subsidiary of a large manufacturer, and allow them to offer more generous loans at a time of mounting concerns over vehicle affordability.
Ford Credit applied to set up its industrial bank in 2022, but faced regulatory resistance to non-financial companies entering the banking industry.
In June 2024, General Motors withdrew an application for an industrial loan charter — which allows a company to own both commercial groups and banks — that it had submitted in 2020. It resubmitted its application in January 2025, 10 days after Donald Trump’s presidential inauguration.
Toyota and BMW already operate industrial banks in the US, while European car group Stellantis applied for an industrial loan charter in February last year.
Opponents of the big US carmakers’ applications argue that industrial banks tied to manufacturers will be tempted to take more lending risks in order to increase sales. GMAC, the last lender GM operated using an industrial loan charter, received a $17bn government bailout in 2008 as part of the Troubled Asset Relief Program.
Federal Reserve economists noted in November that delinquencies on car loan debt in the US in the third quarter of last year were 1.5 times higher than in mid-2021, and had “increased to levels not observed since the Great Financial Crisis”.
The approvals come after several crypto companies and fintechs have in the past year sought to take advantage of the administration’s openness to new companies entering the regulated banking sector. Crypto companies including Coinbase and fintechs such as PayPal and Brazilian neobank Nubank applied for banking charters last year.
Comptroller of the Currency Jonathan Gould said in December that new entrants to the sector were “good for consumers, the banking industry and the economy”.
“They provide access to new products, services and sources of credit to consumers, and ensure a dynamic, competitive and diverse banking system,” he added.
Last year, US regulators also approved the launch of Erebor, a new bank backed by tech billionaires with ties to the Trump administration, including Peter Thiel’s venture fund.
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