Ally Bank is also known as Ally Financial. It's a bank with a very interesting history that we've recently reviewed. We discovered some interesting facts about the company when looking through its past and present. If you're looking for a car loan, it's an option that is well worth checking out. Before you do, here are 20 things that you probably didn't know about Ally Bank that may help you decide if it's a financial institution that you would want to do business with.
1. Ally Financial was previously known as GMAC
If you've ever had an auto loan through GMAC, then you've already had experience with Ally Bank. GMAC is the acronym for General Motors Acceptance Corporation. The company is an American holding company that specializes in auto financing and much more. This is a fun fact about Ally Bank that a lot of people are not aware of, but if you had any type of loan through the previous GMAC, then you were probably informed about the name change in the company that serviced your loan.
2. The company will celebrate its 100th year in 2019
Ally Bank started out as a financial institution that was founded by General Motors in 1919. It was established under the name of General Motors Acceptance Corporation a century ago. It's been in business for a very long time and the bank has been able to withstand the ups and downs in the auto industry as well as the roller coaster of economic surges and dips throughout the past century. When other financial institutions were closing their doors and folding up, GMAC stayed the course and managed to keep their services in operation. It's an old and trusted financial institution.
3. They founded a motor vehicle insurance company
The Motors Insurance Corporation was founded by GMAC in 1939. The company offered vehicle insurance for its customers. This service was perfectly aligned with the auto financing component of the parent company which offered auto loans as well as home mortgages and more. Customers who secured their auto loans with GMAC and who insured their vehicles through Motors Insurance were less of a risk when it came to repayment of their auto loan through the parent company.
4. GMAC diversified in 1985
While still under the direction of Roger Smith, GM took the initiative to strengthen the company through diversification. Previously committed to providing auto loans, the company acquired another financial institution as a subsidiary. GM acquired the Norwest Mortgage company Colonial Mortgage. At the time of the acquisition, the company was estimated to bring with it an $11 billion mortgage portfolio. This brought a new aspect of loan servicing into the financial products that GM was ale to offer for its customers. Home mortgages were added to the offerings for auto loans and auto insurance. GM was developing at a healthy pace and the diversification made them more attractive to a larger segment of the population in need of financial services.
5. The company was rocked by a costly scandal in 1991
GM ran into a sticky situation in 1991. One of their executives was involved in an illegal operation that cost the company dearly in terms of its reputation and well as financially. John McNamara had committed fraud and was convicted of running a Ponzi scheme. It generated a bad debt for the GM company in the amount of a $436 million loss. GM was forced to write off a total o $275 million of this debt. It made national headlines and shook the company to its core.
6. GM expanded into real estate in the late 1990s
While still operating under the name of GMAC, the bank formed yet another company in the vein of diversification. in 1998, GMAC Real Estate was developed and launched. They had branched out in several directions and were not only providing home and auto loans as well as car insurance, they were not getting into real estate. It made sense to follow this direction because GM was already servicing home loans.
7. GM branched out further in home mortgage services
In 1999, GM acquired the Ditech company. The following year they established a direct bank which was named GMAC Bank. Just five years later, in 2005, they developed the GMAC ResCap to serve as the holding company that would preside over its mortgage operations. What had started as a financial service for the auto industry had now made a full launch into the dual services of home and auto and they became a major force in home mortgage loans as well as in real estate. The American public was in need of car and auto services and GM filled the gap nicely with diversified services.
8. A new company took over GMAC in 2006
While the customers who held loans through GMAC probably didn't notice any changes, in 2006, a private equity firm named Cerberus Capital Management purchased a 51% interest in GMAC. General Motors had a agreed to the proposition that gave the firm a controlling interest in GMAC. In the same year, GMAC sold a portion of GMAC Commercial Holdings, which was its real estate division to Five Mile Capital Partners, Kohlberg Kravis Roberts and Goldman Sachs. It was enough to give them controlling interest and the real estate portion was renamed Capmark.
9. Capmark filed for bankruptcy in 2009
Tough times hit the financial industry in the early 2000s era. The real estate portion of GM was sold to Brookfild Asset Management and in 2009, Capmark was forced to file for bankruptcy.At this time in its history, its loan origination and servicing operations were acquired by Berkadia which was a venture of Berkshire Hathaway and Leucadia National. A lot of major financial institutions were trading hands during this turbulent time in North American economics.
10. GMAC Rescap received US treasury funds in 2008
Hard times brought about catastrophic losses for GMAC ResCap in 2008. The United States Treasury made an investment of $17.2 billion to keep them from losing their solvency. At the beginning of 2009, they shut down their Nuvell Financial Services division which was in charge of its subprime lending activities. Subprime loans were one of the components that had gotten many of the major lending institutions in trouble to begin with. By 2014, the US Treasury had sold the remainder of its stake in the company and they had actually made a profit. After making an initial investment of $17.2 billion, they were able to recover $19.6 billion which netted them a $2.4 billion return on their investment.
11. GMAC became Ally Financial in May of 2010
GMAC re-branded itself as Ally Financial in 2010. They had acquired a resort finance business when involved in real estate and in the same year, they sold the business to Centerbridge partners. Just two years later, Ally Financial brought another $3.8 billion into its coffers through the sale of its Canadian banking operations to the Royal Bank of Canada.
12. Ally Bank went public in 2014
Ally Bank made an initial public offering which was approved in April of 2014. They became a publicly traded company at this time. Big changes were coming and they relocated their headquarters to the One Detroit Center in 2015. The following year, a brokerage firm named TradeKing acquired them for the sum of $275 million and TradeKing re-branded to the name of Ally Invest in 2016.
13. Ally made a major move in 2016
A mass migration of employees took place in 2016. The company relocated over 1,500 employees to their large and newly renovated building at its Detroit Centre location which occupied 13 floors of space. They maintained a workforce of over 1,200 employees at its Charlotte, North Carolina location, formerly located at 440 S. Church Street. This location was moved with all of its employees to their new Ally Charlotte Center. All of the movement was actually a sign that the company was in good financial condition and well-able to improve the work space environment.
14. By 2018, Ally Financial was ranked among the top 20 in America
Ally Financial made it to the position of the 19th largest banks in the United States as determined by assets in 2018. They had weathered many financial crises that put other financial institutions out of business. They also reached the status of becoming the largest auto finance company n the United States by volume. They were the leader in the auto loan industry.
15. Ally Bank provides a diverse group of financial services
Throughout the decades, Ally Bank, formerly GMAC has evolved and diversified its offerings to include a wide variety of financial services. They've come a long way since their initial launch in 1919, when they just offered auto loans. They sequentially added new services to their portfolio to include auto insurance, mortgage loans, and now offer corporate lending services, online banking, brokerage firm services and credit card services.
16. Ally Bank serves millions of customers
Ally Bank proudly serves an estimated 4.3 million retail customers. They are a financial service provider for more than 18,500 automotive dealerships. They're a major financial institution who serves many larger businesses and corporations as well as individual customers not affiliated with any type of business. They're a bank that assists a diverse group of customers and they do it very well.
17. Ally Bank got into the auto auction business
Ally Bank continues to evolve and add to its diverse portfolio of services within the finance sector. They added an online marketplace for auto auctions in 2000, called SmartAuction. As of current estimates of their statistics, their SmartAuction company has sold over 5 million vehicles and 356,000 of these were sold in 2017 alone. It's a division of the company that is thriving. It was an intelligent move on behalf of executive management because online auctions are becoming more popular with the public. It's a service that adds convenience to both individuals and professionals within the automotive industry.
18. Ally Bank participates in giveaways
As a major financial institution, Ally Bank understands the value of giving out rewards to their loyal customers. They celebrated attaining their 1 million customer mark by distributing 2,300 gift cards to their customers. This was a major milestone for the company but the significance of the 2,300 is because this was how long it took them to reach the one million mark. The marketing department of the bank also participated in a 2018 giveaway that they called Banksgiving. They asked customers what they needed and then selected customers to received monetary gifts in amount from $25 to $55,000 as a charity donation.
19. Ally Bank's employees volunteer to raise money for charity
Ally Bank set aside the month of November as their "Giving Back Month." Employees are allowed to volunteer to given 8 hours of personal time off to volunteer for fundraising activities. It's been a successful program that has resulted in a total of 17,000 hours of volunteer time donated in 2017 and Ally Bank paid $25 per hour for every employee hour donated. They raised a total of $800,000 in bank sponsored funds which were donated to charity.
20. Ally Bank engages in Sponsorship
Here is a fun and interesting fact about Ally Bank that many people are not aware of. Since they are heavily involved in financial aspects of the automotive industry, it just makes sense that they would serve as sponsor in related events. They sponsor the South Florida Auto Show for starters. They also sponsor the Time Magazine Quality Dealer Award within the automotive industry. Ally Bank began a new sponsorship which is set to kick off in 2019. They will be the main sponsor for Jimmie Johnson at Hendrick Motorsports. He is the 7 time Monster Energy NASCAR Cup series champion. When the bank was known as GMAC, they had sponsored several Henrick Motorsports events from 1998 all the way through 2007, including the 2003 NASCAR Busch Series championship. The company remains loyal to the industry that they originally based their business upon.
Written by Dana Hanson
Read more posts by Dana Hanson