"Given the recent financial market turmoil, people are looking for a safe, honest and efficient place to save."
General Motors CEO Fritz Henderson said this week that GM no longer has any representation on the board of GMAC. GM sold a majority interest in GMAC to Cerberus Capital Management back in 2006. Last December, GMAC was reorganized in an exchange for $5 billion in federal funds. When it accepted money from the Trouble Asset Relief Program (TARP), GMAC was required to loosen its ties to Cerberus and GM, which is why Henderson said he doesn’t always have up to the minute information about what’s going on at the big finance company.
GMAC, which is now being overrun by refugees from Wall Street meltdown, has now announced that it is changing the name of the consumer bank that is one of the keys to its future plans.
“The world doesn’t need another bank, it needs a better bank.” This philosophy is at the heart of the launch of Ally, a new brand for a U.S. online bank designed to disrupt the status quo and challenge win-lose practices in the banking industry, GMAC said. Ally Bank offers a variety of savings products, including no-penalty certificates of deposit (CDs), online savings accounts and money market accounts.
“We are launching a new brand with a new approach of treating customers with total transparency,” said GMAC Chief Executive Officer Al de Molina. “Unlike other banks which depend on fees as a business model, we want to make money with customers, not off customers.”
The transition of GMAC Bank to Ally Bank will be seamless for current bank customers. “Both current and new customers will benefit from our improved online banking experience, the avoidance of teaser tactics, true no-penalty CD products, and rates among the best in the country for all of our savings products,” said Molina, who promised that Ally or GMAC customers won’t have to put up with sneaky disclaimers or teaser rates.
“The Ally brand is founded on three principles: Talking straight, doing what is right for the customer, and being obviously better than the competition,” said Sanjay Gupta, chief marketing officer.
“It is a promise from our company to our customers. We believe that being direct and honest is the best way to build lasting customer relationships,” Gupta added, “Given the recent financial market turmoil, people are looking for a safe, honest and efficient place to save and grow their money. Ally Bank offers that place.”
Gupta said GMAC developed the Ally brand following extensive conversations with customers, who clearly expressed the need for a trusted bank partner. “The name Ally aptly fits the character of the brand,” Gupta said.
Ally Bank is insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor through December 31, 2009.
Meanwhile, GMAC Financial Services is also looking for some more help from its new partners at the U.S. Treasury Department. An announcement about additional federal aid for GMAC could come any day now, according to observers.
As TDB has reported GMAC is supposed to come up by early June with a plan to increase the common shareholder equity component capital by $11.5 billion, of which $9.1 billion must be new money.
It could sell new stock or issue mandatory convertible preferred shares. The additional capital demanded by the Treasury Department does not include the additional capital required to finance Chrysler dealers and customers related to GMAC’s previously announced agreement with the automaker.
The Treasury Department has indicated that it intends to support GMAC by providing the capital required to support the financing of Chrysler dealers and customers.