General Motors (GM) has once again applied to establish an industrial bank, resubmitting its application with the Federal Deposit Insurance Corp. (FDIC) in late January. The automaker’s previous attempts failed, with regulators citing concerns over the company’s financial history. During the 2008 financial crisis, a bank that GM previously owned nearly collapsed, requiring a $17.2 billion taxpayer-funded bailout.
Now, with the expectation that financial regulations will likely ease under the Trump administration, GM is making another attempt. They’re not alone in this push. Stellantis and Ford have also submitted applications for banking licenses, aiming to expand their financial services. Owning an industrial bank would allow automakers to accept deposits, finance vehicle purchases, and provide loans to dealers. This move could significantly lower funding costs and enhance financial offerings for consumers.
Industrial banks operate under state charters but require federal deposit insurance to protect against financial instability. Because of this, applications must be approved by the FDIC, making the agency’s ruling a key decision for both the auto industry and broader corporate banking ambitions.
The question of whether commercial firms, including the Big Three automakers, should be allowed to own banks has been one of the most divisive financial policy debates among lawmakers. The Biden administration was previously reluctant to allow nonfinancial companies to enter the banking industry, maintaining a long-standing separation between commerce and banking. However, a shift in regulatory priorities under the Trump administration could change that stance, setting a precedent for other large corporations, particularly Big Tech firms like Apple, Google, Amazon, and Facebook.
