The Federal Deposit Insurance Corporation (FDIC) approved Ford Motor Company's application for deposit insurance to establish Ford Credit Bank.
The new entity is a Utah-chartered industrial bank. It focuses on providing automotive financing products across the United States. The bank's primary business involves purchasing retail installment sales contracts from Ford dealerships.
Ford Credit Bank will fund operations mainly through retail savings accounts and time deposits. It will gather these deposits via its website and mobile application.
This initiative is expected to broaden Ford's financing capabilities. It could also lower Ford's cost of funding over the long term.
As part of the approval, Ford Motor Company must maintain specific capital and liquidity levels to support the bank's operations.