FRANKLIN, Tenn.–Nissan Motor Acceptance Co. has applied for an industrial loan company charter from the FDIC and the Utah Department of Financial Institutions.
“Forming Nissan Bank U.S. gives us greater flexibility to serve dealers more efficiently and competitively – so they can better serve their customers,” Kevin Cullum, president of Nissan’s financial services arm, said in a statement. “From small towns to major markets, this Bank will help dealers access the tools they need to grow – while reinforcing our long-term investment in the U.S. market.”
Nissan did not provide additional details around what specific products a charter would allow it to offer to make financing more flexible or cost-effective. Other automotive firms that are also seeking ILC charters include GM Financial and Ford.
Some Lawmakers Object
Banking Dive noted in its analysis that some lawmakers, however, have long argued the ILC designation exempts companies from the definition of a “bank” under the Bank Holding Company Act. As long as industrial banks don’t offer demand deposit accounts, they can bypass oversight by the Federal Reserve, opponents have said, according to the report.
The Banking Dive report further noted that Rebecca Romero Rainey, CEO of the Independent Community Bankers of America, has said in the past, “Any company that wishes to own a full-service bank should be subject to the same restrictions and supervision that apply to any other bank holding company.
Long ILC Dry Spell
The FDIC went more than a decade without approving an ILC charter until it granted one in 2020 to Square (now Block) and student loan service Nelnet.
Other applications for ILC charters continue to wait, and some companies have pulled their applications, including GM.
