by Matthew Russell Lee, Patreon Book Substack
BRONX / FEDERAL COURT, Feb 7 – General Motors is an opportunity. It previously applied to try to get into banking through the Utah Industrial Loan Company loophole, but was opposed and withdrew.
Now, for obvious reasons, it has reapplied - under the old CRA rules, which have been repealed and superseded, no less. On February 7 Fair Finance Watch filed opposition with the FDIC and Utah regulator:
This is a timely first comment by Fair Finance Watch opposing and requesting an extension of the FDIC's public comment period on the Applications by General Motors for deposit insurance.
This re-submitted proposal, if approved, would make a mockery of the Community Reinvestment Act. The FDIC should hold public hearings, and on the current record deny the application.
GM does business and its bank would, well beyond Utah. But it seeks to limit its CRA to… Utah. Tellingly, the application states that "GM Financial has developed this Community Reinvestment Act (“CRA”) plan based on the Federal Deposit Insurance Corporation (“FDIC”) CRA regulations that were effective on March 31, 2024, rather than the new framework that was finalized on October 24, 2023 (the “2023 CRA Framework”).1 Implementation and enforcement of the 2023 framework was enjoined by the District Court for the Northern District of Texas on March 29, 2024,2 and its future effectiveness remains uncertain."
Not only is GM, in reapplying, seeking to take advantage of that - it is clearly feeling it is more likely now to get a rubber stamp. But there even community banks oppose these ILC applications. The questions to be considered at the public hearing are not only the regulatory evasion of ILCs - more unacceptable after the financial meltdown - but also CRA assessment areas, covering of affiliates, etc.
The FDIC is administering a loophole that even many in the industry, because consumer and CRA advocates, oppose. So, it is time for public hearings.
For the record, this is a timely comment on: " 20250105 GM Financial Bank Salt Lake City-Provo-OREM Area SALT LAKE CITY, UT Deposit Insurance (New Bank) 01/31/2025 03/02/2025"
It is unclear why this is listed as an application to the Chicago Region of the FDIC, which covers "Territory: Illinois, Indiana, Kentucky, Michigan, Ohio, Wisconsin." There should be an explanation.
Inner City Press also opposes the redactions to the application, including to the "Financial Model" Watch this site.
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