Jason Posted November 27, 2020 Share Posted November 27, 2020 WSJ News Exclusive | GM Plans to Seek Banking Charter to Grow Auto-Lending Business WWW.WSJ.COM General Motors Financial Company has been talking to federal and state banking regulators for months about forming an industrial loan company and could file applications to do so as early as December, people familiar with the matter said. Quote An industrial-loan charter allows companies to own both commercial firms and banks, a setup prohibited by a traditional banking license. This is familiar territory for GM. The auto maker used this type of charter to operate GMAC, its former lending arm that nearly failed under the weight of soured subprime mortgages and was bailed out by the government during the 2008 financial crisis. This time around, the company would use its banking charter—and the ability to accept deposits—to support its auto-finance business, according to a person familiar with the matter. Deposits would provide a stable, low-cost source of capital for GM Financial to grow its business of lending to GM car buyers and dealers. GM Financial currently issues debt to fund most of its lending. Quote Link to comment Share on other sites More sharing options...
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