Ally Financial

Last updated
Ally Financial Inc.
FormerlyGMAC Inc. (1919–2010)
Company type Public
Industry Financial services
Founded1919;105 years ago (1919) (as General Motors Acceptance Corporation)
Headquarters Ally Detroit Center
Detroit, Michigan, United States (Ally Financial)
Sandy, Utah, United States (Ally Bank)
Ally Charlotte Center
Charlotte, North Carolina, United States (Corporate Center)
Key people
Franklin W. Hobbs (chairman)
Michael Rhodes (CEO)
Russell Hutchinson (CFO)
Services Car finance
Online banking
Mortgage loans
Stockbroker
Electronic trading platform
RevenueIncrease2.svg US$8.206 billion (2021)
2,342,000,000 United States dollar (2022)  OOjs UI icon edit-ltr-progressive.svg
Decrease2.svg US$1.020 billion (2023)
Total assets Increase2.svg US$196.392 billion (2023)
Total equity Increase2.svg US$13.766 billion (2023)
Number of employees
11,100 (2023)
Website ally.com
Footnotes /references
[1]

Ally Financial Inc. (known as GMAC until 2010) is a bank holding company incorporated in Delaware and headquartered at Ally Detroit Center in Detroit, Michigan. The company provides financial services including car finance, online banking via a direct bank, corporate lending, vehicle insurance, mortgage loans, and other related financing services such as installment sale and lease agreements.

Contents

Ally is one of the largest car finance companies in the U.S. It provides car financing and leasing for 4.1 million customers and originated 1.2 million car loans in 2023. It is on the list of largest banks in the United States by assets and has 2.0 million depositors. [2] [1] The company has sold more than 5 million vehicles, including 505,000 vehicles sold in 2023 via its SmartAuction online marketplace for auto auctions, launched in 2000. [1]

History

1919-1990

The company was founded in 1919 by General Motors (GM) as the General Motors Acceptance Corporation (GMAC) to provide financing to automotive customers. [3] In 1939, the company founded Motors Insurance Corporation and entered the vehicle insurance market. [4]

In 1985, while GM was under the leadership of Roger Smith, who sought to diversify the company, GMAC formed GMAC Mortgage and acquired Colonial Mortgage as well as the servicing arm of Norwest Mortgage, which included an $11 billion mortgage portfolio. [5]

1991-2009

In 1991, the company was forced to write-off $275 million in bad debt as part of a $436 million loss suffered from fraud committed by John McNamara, who ran a Ponzi scheme. [6]

In 1998, the company formed GMAC Real Estate. [4] In 1999, GMAC Mortgage acquired Ditech. [7] In 2000, the company formed GMAC Bank, a direct bank. [4] In 2005, the company formed GMAC ResCap as a holding company for its mortgage operations. [4]

In 2006, General Motors sold a 51% interest in GMAC to Cerberus Capital Management, a private equity firm. Also that year, GMAC sold a controlling interest of GMAC Commercial Holdings (its real estate division renamed Capmark) to Goldman Sachs, Kohlberg Kravis Roberts, and Five Mile Capital Partners. [8] GMAC Real Estate was sold to Brookfield Asset Management. In 2009, Capmark filed for bankruptcy and its North American loan origination and servicing business was acquired by Berkadia, a joint venture of Leucadia National and Berkshire Hathaway. [9]

On December 24, 2008, the Federal Reserve accepted the company's application to become a bank holding company. [10] In January 2009, the company closed Nuvell Financial Services, its subprime lending division. [11] [12]

As a result of losses in GMAC ResCap, a subsidiary of the company, the United States Department of the Treasury invested $17.2 billion in the company in 2008–2009. The Treasury sold its last stake in the company in 2014, recovering $19.6 billion from its $17.2 billion investment. [13]

In April 2009 the bank announced plans to move its Charlotte office from Ballantyne to 106,525 square feet (9,896.5 m2) on four floors of 440 South Church, with possible expansion later. At the time, the bank had 265 Charlotte employees in three business units. [14] [15]

In May 2009, GMAC Bank was rebranded as Ally Bank. [16]

2010-2019

In May 2010, GMAC re-branded itself as Ally Financial. [17]

In September 2010, the company sold its resort finance business to Centerbridge Partners. [18]

In 2012, the company sold its Canadian banking operations to Royal Bank of Canada for $3.8 billion. [19] In April 2014, it became a public company via an initial public offering. [20] In 2015, it moved its headquarters to One Detroit Center, which was subsequently renamed Ally Detroit Center. [21] In June 2016, the company acquired TradeKing, a stockbrokerage, for $275 million, which was re-branded as Ally Invest. [22]

In May 2016, Ally Bank re-entered the mortgage business with the launch of its direct-to-consumer offering called Ally Home. [23] In April 2019, Ally Home partnered with Better.com for mortgage loan selling, processing, mortgage underwriting, and closing services. [24]

In October 2019, Ally acquired Health Credit Services (HCS), a technology-focused patient financing company based in Charlotte, North Carolina. [25] It was sold to Synchrony Financial in March 2024. [26]

2020-present

On May 3, 2021, Ally began occupying 725,000 square feet at Ally Charlotte Center. [27] [28] [29] [30]

In December 2021, Ally acquired Fair Square Financial, a credit card company, for $750 million and rebranded it as Ally Credit Card. [31]

Awards and recognition

In 2022, the Disability Equality Index (DEI) listed Ally as one of the Best Places to Work for Disability Inclusion. [32]

Sponsorships

In 2022, Ally committed to reach equal spending in paid advertising across women's and men's sports programming over the next five years. [33]

Sponsorships include:

2013 discrimination settlement

In December 2013, the Consumer Financial Protection Bureau (CFPB) and United States Department of Justice ordered the company to pay $80 million in consumer monetary damages and $18 million in civil penalties after determining that 235,000 minority borrowers paid higher interest rates for auto loans originated between April 2011 and December 2013 because of the company's discriminatory pricing system. The higher rates resulted from the company's specific policy of allowing dealers to charge, at their discretion, a "dealer markup" above Ally's established "buy rate" and then compensating dealers based on the markup. Ally provided an incentive for dealers to charge higher rates, in violation of the Equal Credit Opportunity Act. [49] [50]

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References

  1. 1 2 3 "Ally Financial 2023 Form 10-K Annual Report". U.S. Securities and Exchange Commission . February 20, 2024.
  2. ↑ "Large Holding Companies". Federal Financial Institutions Examination Council.
  3. ↑ Hanson, Dana (January 25, 2019). "20 Things You Didn't Know About Ally Bank". Money .
  4. 1 2 3 4 Warren, Elizabeth (2011). "Unique Treatment of General Motors Acceptance Corp. (GMAC) Under the TARP". DIANE Publishing. ISBN   978-1-4379-3080-1.
  5. ↑ Gruber, William (March 14, 1985). "GMAC Buying Mortgage Portfolio" . Chicago Tribune .
  6. ↑ Potts, Mark; Brown, Warren (April 18, 1992). "General Motors Alleges Monumental Fraud" . The Washington Post .
  7. ↑ Strickland, Daryl (March 23, 1999). "DiTech Funding to Be Bought by GMAC Mortgage". Los Angeles Times .
  8. ↑ "General Motors Acceptance Corporation Form 8-K" (Press release). U.S. Securities and Exchange Commission. March 23, 2006.
  9. ↑ Fitzgerald, Patrick (November 25, 2009). "Judge Approves Sale Of Capmark Servicing Unit To Berkadia" . The Wall Street Journal .
  10. ↑ Dash, Eric; Bajaj, Vikas (December 24, 2008). "Fed Approves GMAC Request to Become a Bank" . The New York Times .
  11. ↑ Basch, Mark (January 12, 2009). "GMAC closing Jacksonville-based subprime auto loan company". The Florida Times-Union . Jacksonville.
  12. ↑ Walden, Jamie (January 13, 2009). "Nuvell Financial Services Closes, Arkansas Jobs Not Affected" . Arkansas Business .
  13. ↑ "U.S. Treasury Sells Ally Financial Stake; No More Government Motors". Forbes . December 31, 2014.
  14. ↑ Boye, Will (April 10, 2009). "GMAC Financial selects 440 South Church". Charlotte Business Journal .
  15. ↑ Kroll, Kathryn (March 20, 2009). "GMAC Financial adding jobs with North Carolina expansion". The Plain Dealer . Cleveland.
  16. ↑ "GMAC Bank re-brands itself as Ally Bank" . Los Angeles Times . May 16, 2009.
  17. ↑ "GMAC Posts Profit, to Change Name to Ally". CNBC . Associated Press. May 3, 2010.
  18. ↑ "Centerbridge buys Ally's resort finance unit". Reuters .
  19. ↑ "Royal Bank buys online savings bank Ally for $3.8B". CBC News . October 23, 2012.
  20. ↑ "Ally Financial Announces Pricing of Initial Public Offering" (Press release). Ally Financial. April 9, 2014 – via PR Newswire.
  21. ↑ Shepardson, David (March 31, 2015). "Ally Financial moving to One Detroit Center". The Detroit News .
  22. ↑ Burns, Hilary (May 12, 2017). "TradeKing transformation complete after acquisition by Ally". Charlotte Business Journal.
  23. ↑ Burns, Hilary. "Ally Bank launches mortgage offering". Charlotte Business Journal.
  24. ↑ Lane, Ben. "Ally Financial partnering with Better.com to launch digital mortgage platform". Housing Wire.
  25. ↑ "Ally Financial Announces Completion of Acquisition of Health Credit Services" (Press release). Ally Financial. October 1, 2019. Retrieved April 21, 2023– via PR Newswire.
  26. ↑ "Synchrony Completes Acquisition of Ally Lending" (Press release). PR Newswire. March 4, 2024.
  27. ↑ Fahey, Ashley (February 11, 2020). "Ally Financial to occupy 'very large majority' of uptown tower". Charlotte Business Journal.
  28. ↑ Hudson, Caroline (April 22, 2021). "ALLY'S BIG MOVE Fast-growing online bank joins major rivals on Tryon Street with opening of new hub". Charlotte Business Journal.
  29. ↑ Fahey, Ashley; Burns, Hilary (September 20, 2017). "Ally Financial to anchor long-awaited Crescent Communities uptown project". Charlotte Business Journal.
  30. ↑ Portillo, Ely; Roberts, Deon (September 20, 2017). "Ally Bank leasing Crescent Communities' new Tryon Place tower". The Charlotte Observer .
  31. ↑ "Ally Financial closes acquisition of credit card platform Fair Square Financial" (Press release). Ally Financial. December 1, 2021 – via PR Newswire.
  32. ↑ "2022 Best Places to Work". Disability Equality Index.
  33. ↑ "Ally pledges equality in media spend, issues bold call to action to further drive parity in women's sports" (Press release). Ally Financial. June 23, 2022 – via PR Newswire.
  34. ↑ "NASCAR, Ally announce official partnership" (Press release). NASCAR. February 5, 2023.
  35. ↑ Hitt, Kevin. "Rocket League, Ally Financial team up for new women's competition". Sports Business Journal . Retrieved 2023-04-21.
  36. ↑ Hannah, Sampson (October 14, 2014). "Ally Financial new sponsor for Miami International Auto Show". Miami Herald .
  37. ↑ "Ally Renews Exclusive Sponsorship of Time Dealer of the Year Through 2021" (Press release). Ally Financial. July 22, 2015 – via PR Newswire.
  38. ↑ "Ally Financial extends full-season primary sponsorship of Hendrick Motorsports". Hendrick Motorsports . October 4, 2019.
  39. ↑ "Ally signs three-year, full-season sponsorship extension with Hendrick". NASCAR . October 4, 2019.
  40. ↑ Utter, Jim (October 28, 2018). "Jimmie Johnson finds new sponsor in Ally Financial for 2019 season". Motorsport.com .
  41. ↑ "Hendrick Motorsports taps Alex Bowman to drive No. 48 Ally Chevrolet in 2021" (Press release). Ally Financial. October 6, 2020 – via PR Newswire.
  42. ↑ "Ally, DC, Milestone Media, and Warner Bros. discovery reveal NASCAR paint scheme inspired by The Milestone Initiative" (Press release). Ally Financial. June 29, 2022 – via PR Newswire.
  43. ↑ "First look: Bowman's No. 48 will have some 'Static' at Atlanta Motor Speedway". NASCAR. Archived from the original on 11 August 2022.
  44. ↑ Woody, Larry (January 19, 2021). "Superspeedway's inaugural race christened Ally 400". The Wilson Post .
  45. ↑ "NWSL Welcomes Ally as League's First Official Banking Partner, League-Wide Sleeve Sponsor" (Press release). National Women's Soccer League. March 30, 2021.
  46. ↑ "Ally signs on as first official NWSLPA partner following inaugural CBA". Just Women's Sports. February 3, 2022.
  47. ↑ Ajdrejev, Alex (July 22, 2020). "Welcome, Charlotte FC. The city's MLS expansion team gets a new name and crest". The Charlotte Observer.
  48. ↑ Malsher-Lopez, David (December 4, 2020). "Jimmie Johnson to race for Action Express in Rolex 24". Motorsport.com .
  49. ↑ "CFPB and DOJ Order Ally to Pay $80 Million to Consumers Harmed by Discriminatory Auto Loan Pricing" (Press release). Consumer Financial Protection Bureau. December 20, 2013.
  50. ↑ Ficklin, Patrice (January 29, 2016). "Harmed Ally borrowers have been sent $80 million in damages" (Press release). Consumer Financial Protection Bureau.
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