Ford and GM Approved to Establish Auto Finance Banks

The U.S. Federal Deposit Insurance Corporation (FDIC) has approved Ford Motor Company and General Motors to establish their respective banks—Ford Credit Bank and GM Financial Bank. Both banks are chartered in Utah and classified as industrial banks, primarily engaging in automotive finance by purchasing retail installment sales contracts. The FDIC requires both banks to maintain a Tier 1 leverage ratio of at least 15% and explicitly mandates that Ford and GM provide support for their banks’ capital and liquidity positions. This move marks a further deepening of the two automakers’ strategic presence in the automotive finance sector.