FDIC clears way for Ford, General Motors to set up industrial banks

WASHINGTON, Jan 22 (Reuters) – The Federal Deposit Insurance Corporation ​announced Thursday that it ‌had approved deposit insurance applications from ‌Ford Motor Company and General Motors Company, clearing the way for the auto manufacturers ⁠to establish ‌industrial banks and begin providing some financial services.

The ‍conditional approvals, which require the companies to stand up lending arms ​within 12 months, are the ‌latest development in a long-running feud between some companies and the banking industry. Traditional lenders have argued against so-called “industrial ⁠loan charters,” saying ​it allows ​commercial firms to improperly engage in banking without sufficient ‍oversight. Proponents ⁠of the charters argue it allows firms to ⁠provide limited financial services to customers.

(Reporting ‌by Pete Schroeder, Editing ‌by Franklin Paul)