General Motors received approval from the Federal Deposit Insurance Corporation (FDIC) to create GM Financial Bank. The new entity will operate as a Utah-chartered industrial bank. This move allows GM's financing arm to hold deposits and manage nationwide auto financing directly.
The bank focuses its business model on providing automotive financing. It will primarily purchase retail installment contracts from the existing GM Financial. Funding will be sourced mainly through online savings accounts and time deposits.
The FDIC approval is contingent on specific conditions. The bank must maintain a minimum 15 percent tier 1 leverage ratio. General Motors Company committed to supporting the bank's capital and liquidity.