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Nissan Ditches Bank Plan Amid Cost Cuts
24 Aug
Summary
- Nissan canceled its plan to establish Nissan Bank U.S.
- Automakers pursue industrial banks for cheaper funding.
- Industrial banks offer a regulatory loophole for non-financial firms.
Nissan has recently canceled its intention to establish Nissan Bank U.S. in Salt Lake City, citing a need for cost reductions and a focus on long-term financial health. This decision comes as many automakers have pursued operating federally insured industrial banks since 2025.
These industrial loan companies (ILCs) allow non-financial companies to own state-chartered, federally insured banks, a structure generally restricted by U.S. law. The appeal lies in accessing cheaper and more stable deposit funding compared to issuing bonds or asset-backed securities.
Historically, regulators treated ILCs as a loophole, with the FDIC placing a moratorium on new applications in 2006. While the stance loosened, allowing more applications, critics argue that allowing companies to own their financing banks creates conflicts of interest, undermining the separation of banking and commerce.
