Subsidiary of General Motors reapplies for Integrated Labor Contract (ILC)
In a move that has been under scrutiny for some time, GM Financial, the financial arm of General Motors, resubmitted its application for an Industrial Loan Company (ILC) charter on a specific date, though the exact date has not been publicly disclosed. However, as of August 2025, there are no public updates or disclosures regarding the current status of this application with the Federal Deposit Insurance Corp (FDIC).
In June 2021, GM Financial withdrew its application from the FDIC's consideration. This decision came after concerns were expressed by Travis Hill, the new FDIC Acting Chair, who voted no on a proposed rulemaking in July 2021. Hill's concerns, along with those of other opponents, revolve around the potential loopholes that the ILC designation might create, allowing companies to bypass Federal Reserve oversight.
The proposed ILC charter for GM Financial was met with opposition from various trade groups, including the Independent Community Bankers of America (ICBA), who argue that ILCs violate the separation of banking and commerce and leave gaps in oversight. Senators John Kennedy and Sherrod Brown have also introduced bills in 2019 and 2023, respectively, aiming to close these loopholes and subject ILCs to Federal Reserve supervision.
If approved, GM Financial's ILC would provide stable, cost-effective funding and expand financing options to retail auto consumers, according to Dan Berce, GM Financial's CEO. Berce made a statement in June 2021 regarding the refiling of the application.
It is worth noting that GM Financial gained conditional approval from the Utah Department of Financial Institutions in June 2021. This approval, however, does not necessarily indicate the status of the FDIC application.
The FDIC issued a final rule requiring ILC parent companies to enter into a written agreement with the agency regarding capital and liquidity levels. This rule was approved under the leadership of Martin Gruenberg, who was the lone dissenter on the final rule, but approved Thrivent Financial for Lutherans' ILC charter application.
As for the management team, Bill Donnelly, CEO of the proposed GM Financial Bank, previously held positions at Tesla Finance and global financial services for the automaker, according to LinkedIn. However, there are no public updates regarding changes in the management team.
Michele Alt, a partner at the Klaros Group, suggested in June 2021 that GM Financial may have withdrawn its application due to the upcoming presidential election. Yet, the exact reasons for the withdrawal and the current status of the application remain unclear.
For the most current and detailed updates, checking official GM Financial or FDIC announcements directly would be advisable.
The withdrawal of GM Financial's application in June 2021 was initiated after concerns expressed by Travis Hill, the new FDIC Acting Chair, who feared potential loopholes in the ILC designation and the lack of Federal Reserve oversight. If approved, GM Financial's ILC would potentially expand financing options in the business sector of retail auto consumers, providing stable and cost-effective funding as mentioned by Dan Berce, GM Financial's CEO.
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