WASHINGTON – The FDIC approved deposit insurance applications submitted by Ford Motor Co. to establish Ford Credit Bank and General Motors Company to establish GM Financial Bank. Ford Credit Bank and GM Financial Bank will both be Utah-chartered industrial banks.
According to the FDIC, Ford Credit Bank’s proposed business model will focus on providing automotive financing products nationwide, primarily through the purchase of retail installment sales contracts from independent Ford dealers. Funding will primarily consist of retail savings accounts and time deposits obtained via the bank’s website and mobile application.
“FDIC staff found that Ford Credit Bank satisfied the statutory factors for approval, subject to certain conditions and written agreements,” the agency said. “Among other conditions, Ford Credit Bank will be required to maintain a minimum 15% tier 1 leverage ratio, and Ford Motor Company will be required to support the bank’s capital and liquidity positions.”
About GM’s Bank
In addition, the FDIC said GM Financial Bank’s proposed business model will focus on providing automotive financing products nationwide, primarily through the purchase of retail installment sales contracts from GMF. Funding will primarily consist of savings accounts and time deposits via the bank’s website and a mobile application.
“FDIC staff found that GM Financial Bank satisfied the statutory factors for approval, subject to certain conditions and written agreements,” the agency said. “Among other conditions, GM Financial Bank will be required to maintain a minimum 15 percent tier 1 leverage ratio, and General Motors Company will be required to support the bank’s capital and liquidity positions.
The FDIC approval orders expire if Ford Credit Bank and GM Financial Bank are not established within 12 months, unless extended by the FDIC, the agency said.
