|Traded as||NYSE: ALLY|
|Headquarters||One Detroit Center, Detroit, Michigan, United States|
|Franklin Hobbs (Chairman)
Jeffrey J. Brown (CEO)
William Muir (President)
|Revenue||US$9.577 billion (2013)|
|US$416 million (2013)|
|Profit||US$1.150 billion (2014)|
|Total assets||US$151.828 billion (2014)|
|Total equity||US$15.399 billion (2014)|
|Owner||Third Point Management (8.74%)
Cerberus Capital Management (8.22%)
The Vanguard Group (3.50%)
Number of employees
|7,100 (December 2014)|
Ally Financial Inc., previously known as GMAC Inc. (an acronym for General Motors Acceptance Corporation), is a bank holding company headquartered in Detroit, Michigan, United States at Tower 200 of the Renaissance Center.
The bank has more than 15 million customers worldwide and provides a range of financial services including auto financing, corporate financing, insurance, mortgage services, and online banking. In 2009, Ally employed 18,900 people. In 2008, the firm provided financing to 75% of the 6,450 General Motors dealers.
The company was bailed out by the US Government during the financial crisis of 2007–08 taking over from its previous owner General Motors. On 24 December 2008, the Federal Reserve accepted then-GMAC's application to become a bank holding company. Ally returned to profitability in 2010, posting a net profit of $1.075 billion for the fiscal year. Ally planned but did not execute an initial public stock offering in 2011. Ally announced plans to launch an IPO in spring 2014, and the shares began to be traded as NYSE:ALLY on Apr 10, 2014. The US Government sold its remaining shares in December 2014.
||This section is in a list format that may be better presented using prose. (March 2013)|
The company was founded in 1919 by General Motors Corporation as the General Motors Acceptance Corporation (GMAC) to be a provider of financing to automotive customers. Over the following years the business has expanded to include insurance, online banking, mortgage operations, and commercial finance.
In 1919, GMAC branches opened in Detroit, New York, Chicago, San Francisco, and Toronto.
In 1985, GMAC formed GMAC Mortgage after it acquired the mortgage loan operations of the Colonial Mortgage Service companies and the servicing arm of the former Norwest Mortgage, Inc. In subsequent years, the division acquired additional mortgage-related operations, including ditech.com, and in 2005 the division was reorganized into Residential Capital (ResCap). By that time, the company was heavily into subprime lending.
In 2000, GMAC was given conditional approval to form GMAC Bank.
In 2006, General Motors Corporation sold a 51% interest in GMAC to Cerberus Capital Management, a private equity company. (The next year, Cerberus acquired Chrysler Corporation.) Also in 2006, GMAC divested a majority stake of GMAC Commercial Holdings, its real estate division, to a trio of investors — Goldman Sachs, KKR and Five Mile Capital Partners — thereby creating Capmark Financial Group Inc. Capmark later filed for bankruptcy and was acquired in part jointly by Leucadia and Berkshire Hathaway.
On May 15, 2009, GMAC's banking unit changed its name to Ally Bank.
On May 21, 2009, the U.S. Treasury announced it would invest an additional $7.5 billion in GMAC LLC, which gave the U.S. government a majority stake in the company.
On December 30, 2009, the U.S. Treasury department said that they would invest another $3.8 billion in GMAC because the company had been unable to raise additional funds in the private sector. This raised the total government investment in GMAC to $16.3 billion.
On May 10, 2010, GMAC Inc. announced that it re-branded itself as Ally Financial Inc.
On August 25, 2010, Ally briefs its customer Freddie Mac that it would hold a moratorium on foreclosures and evictions. "Ally Financial officials knew a large number of documents submitted in support of mortgage foreclosure proceedings were mishandled as early as August, but did not take action to stop the evictions until last week, according to a Bloomberg report" stated Washington Post reportage dated September 24, 2010.
On September 20, 2010, Ally announces that, effective October 1, 2010, it will halt evictions on homes in 23 states due to 'an important but technical defect' in its foreclosure filings. (See "Robo Signing" below)
On December 30, 2010, the U.S. Treasury announced it would be converting $5.5 billion of interest-bearing preferred Ally stock into common equity.
On March 31, 2011, Ally Financial filed with the SEC for an initial public offering, although was not pursued due to stock market volatility of summer 2011.
On November 9, 2011, the bank announced it was considering filing for bankruptcy-protection for its ResCap mortgage unit, after the unit's loan write-downs of around half a billion dollars brought it close to the legally required net asset value threshold of $250 million.
As of January, 2012, TARP had about $12 billion invested in Ally. The government stake represented a 74% ownership interest in Ally. In March, 2012, Ally failed the Federal Reserve's financial "stress test" for capital adequacy. The company said in a statement that the Fed's “analysis dramatically overstates potential contingent mortgage risk”. A possible outcome would be a requirement to raise additional capital.
On May 15, 2012, the company put its ResCap subsidiary into Chapter 11 bankruptcy after it failed to make an interest payment of $20 million on unsecured debt. ResCap had written off $22 billion in mortgages in 2009, 2010, and 2011 much of it subprime mortgages. The move was seen as attempt for the company to focus on its profitable core business of auto loans and direct banking (Ally showed a $2.72 billion profit in 2011 in its auto finance unit but had a $402 million loss at ResCap).
In mid-2013, financial columnist Allan Sloan wrote that he thought the Ally bailout would yield a modest profit for the US Treasury.
By my conservative math, that [US] stake is worth $1.5 billion more than it cost. And I’m not including the $6.1 billion of dividends the government has collected from Ally. Taxpayers coming out ahead on a company that spent $8.3 billion, all of it lost, to keep ResCap afloat? That has committed another $2.3 billion to settle its ResCap liabilities? Yes, it’s true.
Sloan also opined that Cerberus Capital and its private-equity investors were "down almost 75 percent on their $8.15 billion Ally investment". Sloan emphasized that his analyses were vulnerable to changing factors before final disposition.
The company's Global Automotive Services offer retail auto financing and leasing; dealer lines of credit for vehicle inventory, equipment or facilities; insurance coverages including retail vehicle service contracts and commercial insurance; and remarketing services through physical auctions and online services. Ally Financial also operates Ally Servicing (previously Semperian) within its Global Automotive Services division. Ally Servicing provides customer relationship management, servicing, and collection through several inbound call centers across the U.S.
Ally Financial's mortgage subsidiaries include Residential Capital, LLC (ResCap) and the mortgage activities of Ally Bank and ResMor Trust. Through these divisions, the company focuses primarily on the residential real estate market in the U.S. Business activities include the origination, purchase, servicing, sale and securitization of residential mortgage loans.
GMAC Home Services is the parent for GMAC Real Estate, formed by the purchase of Better Homes and Gardens Real Estate in 1998, and GHS Mortgage. Brookfield Residential Property Services purchased the GMAC Home Services business in September 2008. Brookfield is a wholly owned subsidiary of Brookfield Asset Management, a global asset manager located in Toronto, Canada.
Ally Financial's subsidiary bank in the U.S., Ally Bank, offers savings products, including certificates of deposit (CDs), online savings accounts, interest checking accounts and money market accounts. ResMor Trust Company offers Ally-branded deposit products in Canada, including online savings, guaranteed investment certificates (GIC) and tax free products. Ally Bank and ResMor Trust Company are members of the Federal Deposit Insurance Corporation and Canadian Deposit Insurance Corporation respectively.
2013 Discrimination Settlement
In December 2013, the Consumer Financial Protection Bureau (CFPB) announced a settlement with Ally Financial to resolve alleged discrimination in its indirect auto lending program. According to the consent order, Ally charged African American borrowers an average of 29 basis points more than similarly situation White borrowers, Hispanic borrowers 20 basis points more than White borrowers, and Asian/Pacific Islanders 22 basis points more than White borrowers. The CFPB concluded that these disparities were statistically significant, based on race, and not based on credit worthiness or objective criteria related to borrower risk. The CFPB also alleged that the higher markups resulted from Ally’s specific policy and practice of allowing dealers to mark up a consumer’s interest rate above Ally’s established buy rate and then compensating dealers based on the markup. Under the terms of the consent order, Ally was required to establish a compliance committee, submit a compliance plan to the CFPB and Department of Justice (DOJ) for review, with the option to submit a non-discretionary dealer compensation plan to the CFPB and DOJ for review, and pay $80 million in consumer monetary damages and $18 million in civil penalties.
Legal action over robo-signing
On October 6, 2010 Attorney General of Ohio Richard Cordray filed suit against Ally Financial Inc seeking $25,000 in penalties for each instance of fraud, in addition to undisclosed amount of consumer restitution. The action could potentially mean hundreds or thousands of individual penalties for each instance of robo-signing that occurred in the state of Ohio.
College Bowl Game
GMAC sponsored Ricky Hendrick in the NASCAR Busch Series in 2000, Brian Vickers in the #5 GMAC Chevrolet in the Busch Series in 2003 and in the #25 GMAC/ditech.com Chevrolet in the Nextel Cup Series in 2004. In 2007 GMAC sponsored Casey Mears with co-sponsorship from the United States National Guard.
- List of banks
- List of banks in United States
- John McNamara — former United States businessman, who was convicted of a Ponzi scheme fraud through gaining loans to a value of $6Bn from General Motors financing arm GMAC, to develop a $400M car sales and property development business.
- "2011 Form 10-K, Ally Financial Inc.". United States Securities and Exchange Commission.
- Dash, Eric; Vikas Bajaj (December 24, 2008). "Fed Approves GMAC Request to Become a Bank". New York Times.
- "Ally Financial Launches Initial Public Offering of Common Stock". March 27, 2014.
- Ally: Our History
- History, gmacmortgage.com.
- "Investor Group Completes Acquisition of Majority Stake in GMAC Commercial Holding Corp." (Press release). Ally Financial. 23 March 2006. Retrieved 21 September 2011.
- Blumenthal, Jeff (19 September 2011), "Berkadia Commercial Mortgage to buy Tavernier Capital", Philadelphia Business Journal, retrieved 21 September 2011
- Schafer, Richard (11 March 2010), Capmark Financial Group Files For Chapter 11 Bankruptcy, Richard Schafer, archived from the original on 21 September 2011, retrieved 21 September 2011
- Detnews.com | This article is no longer available online | detnews.com | The Detroit News[dead link]
- Bunkley, Nick (December 31, 2009). "GMAC Gets $3.8 Billion More in Aid". The New York Times.
- Campbell, Dakin (2010-05-03). "GMAC Posts Profit, Will Change Name to Ally Financial". bloomberg.com. Retrieved 2013-07-27.
- "Ally knew of faulty GMAC documents weeks before eviction moratorium". Washington Post. 2010-09-24. Retrieved 2015-07-14.
- "Ally suspends evictions on foreclosed homes". Washington Post. 2010-09-20. Retrieved 2015-07-14.
- Treasury converting $5.5 billion Ally stock - MarketWatch
- Saha-Bubna, Aparajita; Lynn Cowan (10 June 2011). "Ally Delays IPO Meant to Repay Government Bailout". Wall Street Journal. Retrieved 2 September 2011.
- Ally Rethinks ResCap Ties, Wall Street Journal, 9 November 2011
- Fitch cuts Ally's ResCap on mortgage performance, MarketWatch.com, 11 November 2011
- Gordon, Marcy, "Report: Taxpayers still owed $133B from bailout", Associated Press via Atlanta Journal-Constitution, January 26, 2012. Retrieved 2012-01-26.
- Orol, Ronald D., "Citi among banks that fail Fed stress test", MarketWatch, March 13, 2012. Retrieved 2012-03-14.
- Bomey, Nathan (14 May 2012). "Former GMAC puts mortgage unit in bankruptcy". USA Today, Detroit Free Press.
- Sloan, Allan, "Government profits from Ally? Go figure!", Washington Post, July 2, 2013. Retrieved 2013-07-02.
- "Ownership Structure". Ally. December 2010. Retrieved 2011-04-22.
- "CFPB and DOJ Order Ally to Pay $80 Million to Consumers Harmed by Discriminatory Auto Loan Pricing". Consumer Financial Protection Bureau. Consumer Financial Protection Bureau. Retrieved 11 September 2015.
- Whelan, Robbie (October 7, 2010). "Robo-Signer Debate: Was It Fraud?". The Wall Street Journal. Retrieved 3 April 2014.
- "Ricky Hendrick". Jeff Gordon Online. Retrieved 2013-05-26.
- Ally Bank (U.S.), official website
- Ally (Canada), official website
- Vintage GMAC Commercial
- Ally Auto (U.S.)