GM Finance Unit Seeks Charter for a Bank in Salt Lake City (1)

General Motors Co.’s lending unit formally requested a bank charter as it looks for a cheaper way to fund its auto-loan business.

General Motors Financial Co. submitted its application to form a so-called industrial loan company to the Federal Deposit Insurance Corp. and Utah’s finance regulator, and plans to base its bank in Salt Lake City, according to a filing this month.

As the captive financing arm for the automaker, GM Financial largely uses securitizations to fund its loans. With the ILC charter, the bank would be able to use lower-cost deposits instead -- a move it said would ...