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)
