Utah's industrial banks, explained
Utah charters most of the nation's industrial banks, and in 2026 regulators cleared banks for Ford, GM, Stellantis and Edward Jones while PayPal, Klarna and others wait.
Continuing story: Utah's industrial banks
An industrial bank is a state-chartered bank that must carry FDIC deposit insurance. What sets it apart is ownership: under the 1987 Competitive Equality Banking Act, the company that owns one is exempt from the Bank Holding Company Act, so the parent does not become a bank holding company. That lets companies outside banking, such as carmakers, own a bank. [1]
Only a handful of states can charter industrial banks: California, Colorado, Hawaii, Indiana, Minnesota, Nevada and Utah. Five have operating banks. In Utah, they are regulated jointly by the Utah Department of Financial Institutions and the FDIC. A bank with more than $100 million in assets that accepts demand deposits would lose the exemption. [1]
How it got here
2004: Utah renamed industrial loan corporations "industrial banks." [1]
2005: Walmart applied for an industrial bank, drawing opposition and leading to a moratorium on new approvals. Critics call the charter a loophole. The FDIC approved no new industrial banks from 2008 until 2020. [3]
2020 and 2024: The FDIC approved Nelnet and Square in 2020 and Thrivent in June 2024. Parent companies must sign agreements with the FDIC under its Part 354 rule. [1][3]
Jan. 22, 2026: Ford Credit and GM Financial banks were approved. Ford's application had been received July 22, 2022. [2]
Feb. 27, 2026: The FDIC approved deposit insurance for Edward Jones Bank in Salt Lake City, which plans to make securities-based loans funded by sweep deposits and must keep a 9% tier 1 leverage ratio. [2][4]
May 13, 2026: Stellantis's bank was approved. That made four conditional FDIC approvals since January, with conditions including $1.5 billion in capital for Ford's bank, $667 million for GM's and a 15% leverage ratio. [2][3]
Where it stands
The Department of Financial Institutions' application tracker, last updated Aug. 21, 2026, lists five pending industrial-bank applications: OneMain Bank, filed March 13, 2025; PayPal Bank, Dec. 15, 2025; Klarna Bank USA, July 6, 2026; Albert Bank, July 20, 2026; and Flex Bank, July 23, 2026. Nissan withdrew its application Aug. 19, 2026. [2]
The Edward Jones, GM Financial, Stellantis and Ford Credit banks are listed as approved with opening pending. [2]
What to watch
Decisions on the five pending applications, several from payment and fintech companies. [2]
Openings of the four approved banks. The FDIC's approval for Edward Jones Bank expires if the bank does not open within 12 months, unless extended. [2][4]
Continued criticism of the charter as a loophole. [3]
Sources
- Utah Department of Financial Institutions · Industrial banks
- Utah Department of Financial Institutions · Application status (updated Aug. 21, 2026)
- Goodwin Procter · FDIC approves deposit insurance applications for ILCs with specialty business models (June 17, 2026)
- FDIC · FDIC approves deposit insurance application for Edward Jones Bank (Feb. 27, 2026)
Background explainer by The Utah Ledger. AI-assisted reporting, checked against the sources above.