March 15, 2025
Paul Worthing
Regional Director
San Francisco FDIC
25 Jessie Street at Ecker Square, Suite 2300
San Francisco, CA, 94105-2780
CRACommentCollector@FDIC.GOV
Re: National Community Reinvestment Coalition Opposition to Federal Deposit Insurance Application for Stellantis Bank USA
Director Worthing:
We appreciate the opportunity to comment on Stellantis’ application for deposit insurance as part of its charter application to establish Stellantis Bank USA. The National Community Reinvestment Coalition (NCRC) urges the FDIC to reject the Stellantis Bank USA application for deposit insurance.
NCRC and its grassroots member organizations create opportunities for people to build wealth. We collaborate with community leaders, policymakers, and financial institutions to champion fairness and end discrimination in lending, housing, and business.
We call on the FDIC to reject this application. Granting deposit insurance to Stellantis would create a dangerous mix of commerce and banking, would permit a charter to an entity that would not have a community reinvestment commitment commensurate with its national service area, and would pose a threat to the FDIC deposit insurance fund.
The industrial loan company charter framework creates a dangerous mix of commerce and banking.
If the ILC charter is granted to Stellantis, the company will not be required to register as a bank holding company with the Federal Reserve Board and therefore will not be subject to regulation and supervision by the Federal Reserve Board.
As detailed in a White Paper by the Independent Community Bankers Association, ILCs “provide a loophole in the Bank Holding Company Act allows commercial companies and fintech companies to own or acquire industrial loan companies (ILCs) chartered by Utah and a handful of other states without being subject to federal consolidated supervision, leaving a dangerous gap in safety and soundness oversight.”
The Bank Holding Company Act embodies the long-standing principle of separation of banking and commerce. Approximately 20 ILCs failed between 1990 and 2003.[i] During the financial crisis, several became insolvent and required interventions from the Targeted Asset Relief Program.[ii]
In the United States, bright lines have existed to separate banking from commerce. The industrial loan charter is a problematic contradiction to that principle. If Stellantis receives an ILC charter, regulators will have little insight into its corporate parent’s operations even though they have many interdependent relationships.
The FDIC should be skeptical of tie-ups in this business sector. Automobile manufacturers rely on captive financing divisions to support retail sales. A bank charter provides the benefit of lower-cost deposits as a substitute for commercial debt and equity financing. For Stellantis, lower-cost deposits would increase the interdependence between its financing and manufacturing divisions, leading to correlated risks that undermine safety and soundness. Automobile manufacturing is a highly cyclical industry whose history demonstrates that it can lose money during recessions.
ILCs do not have community reinvestment commitments commensurate with their service area.
ILCs are subject to only minimal requirements under the Community Reinvestment Act (CRA), a critical anti-redlining law. ILCs have weak and inadequate CRA plans with lending commitments to lower-income people only in the cities where the ILC is headquartered. For a large ILC like Stellantis, whose service area is national, its CRA lending commitments would only be relevant in Utah and would result in community reinvestment obligations in only a fraction of its total market footprint.
This application poses concerns for safety and soundness.
Recent reports raise questions about Stellantis’ management and financial sustainability. Stellantis is a multinational automotive manufacturing company. The company designs, manufactures, and sells automobiles bearing its 14 brands: Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram Trucks, and Vauxhall. This international conglomerate has reported multiple crises in the past year, including the departure of the CEO in December 2024. Stellantis recently reported that its net profit was down 70% in 2024.[iii] According to recent reports, the search for a new CEO is still under way. Finally, this month S&P Global downgraded the automaker’s credit rating from BBB+ to BBB due to worries about the company’s ability to maintain its profit margins.[iv]
To grant an ILC charter to a company under this much financial and management strain would create a conflict of interest, with incentives and pressure to generate revenues to support the financially strained parent company. These incentives would pose a direct threat to the FDIC Deposit Insurance Fund.
Conclusion
For the reasons stated above, NCRC opposes Stellantis Bank USA’s application for deposit insurance. We urge the FDIC to reject this application, which seeks the privilege of a bank charter that creates a dangerous mix of commerce and banking, would give a nonbank the benefit of a charter with only minimal requirements under the CRA, and would pose a threat to the FDIC Deposit Insurance Fund.
Thank you for your consideration.
Sincerely,
Jesse Van Tol
President and CEO
NCRC
[i] Arthur Wilmarth, “Beware the return of the ILC,” American Banker, August 2, 2017, https://www.americanbanker.com/opinion/beware-the-return-of-the-ilc.
[ii] Baird Webel and Bill Canis, TARP Assistance for the U.S. Motor Vehicle Industry: Unwinding the Government Stake in GMAC, September 13, 2012 (No. 7–5700; p. 16). Congressional Research Service. https://www.everycrsreport.com/files/20120913_R41846_e7676c5349186d9fbdbb960671742f3c80e07070.pdf.
[iii] Stellantis Full Year 2024 Results, February 26, 2025, https://www.stellantis.com/en/news/press-releases/2025/february/full-year-2024-results.
[iv] S&P Downgrades Stellantis Over Margin Concerns, March 6, 2025, https://www.morningstar.com/news/dow-jones/202503066286/sp-downgrades-stellantis-over-margin-concerns
