ICBA opposes Ford's application to form an ILC

The Independent Community Bankers of America has voiced its opposition to Ford Credit Bank becoming an industrial loan company. 

Ford Motor Co. applied for the ILC in late July. The ICBA, which has for years opposed the ILC, argued that approving the application would let Ford “skirt regulatory oversight and violate longstanding U.S. policy separating banking and commerce.” 

The association, in a letter to the Federal Deposit Insurance Corp., expressed concerns that approval would “create outsized risks” for the Deposit Insurance Fund. The ICBA also questioned Ford’s Community Reinvestment Act plan. 

"While ICBA and community bankers continue calling on Congress to close the industrial loan company loophole, Ford’s application to form a new ILC that lacks consolidated oversight would only put the [DIF] and consumers at greater risk,” ICBA President and CEO Rebeca Romero Rainey said in a press release. 

"Any company that wishes to own a full-service bank should be subject to the same restrictions and supervision that apply to any other bank holding company," she added. 

Ford said in its FDIC application that obtaining an ILC would help it make electric vehicles (EVs) accessible to all Americans. Ford Credit Bank would offer loans for EVs through indirect retail installment and lease contracts by auto dealers. 

The bank, which would also make loans directly to consumers, plans to initially offer financing for conventional vehicles.

“Our unique [CRA] value proposition … will allow us to collaborate with nonprofit partners and leverage Ford’s expertise to enable greater impact in historically marginalized communities with limited or no access to affordable or reliable transportation,” the filing said. 

“These solutions … may include, but are not limited to, nonprofit fleet capacity building, fleet electrification, public-private-philanthropic mobility partnerships and mobility service solutions focused on enabling greater community access and social impact,” the filing added. 

Several former bankers are involved in the effort, including Frank Stepan, a former UBS Bank USA executive who would serve as the bank’s president and CEO.