Ally Financial is a

bank holding company A bank holding company is a company that controls one or more banks, but does not necessarily engage in banking itself. The compound bancorp (''banc''/''bank'' + '' corp ration') is often used to refer to these companies as well. United States ...

organized in

Delaware Delaware ( ) is a state in the Mid-Atlantic region of the United States, bordering Maryland to its south and west; Pennsylvania to its north; and New Jersey and the Atlantic Ocean to its east. The state takes its name from the adjacent Del ...

and headquartered in

Detroit, Michigan Detroit ( , ; , ) is the largest city in the U.S. state of Michigan. It is also the largest U.S. city on the United States–Canada border, and the seat of government of Wayne County. The City of Detroit had a population of 639,111 at ...

. The company provides financial services including

car finance Car finance refers to the various financial products which allow someone to acquire a car, including car loans and leases. Car purchases The most common method of buying a car in the United States is borrowing the money and then paying it of ...

online banking Online banking, also known as internet banking, web banking or home banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial ins ...

via a

direct bank A direct bank (sometimes called a branch-less bank or virtual bank) is a bank that offers its services only via the Internet, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no ...

, corporate lending,

vehicle insurance Vehicle insurance (also known as car insurance, motor insurance, or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury ...

mortgage loan A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...

s, and an

electronic trading platform In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. Various financial products ...

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct excha ...

financial asset A financial asset is a non-physical asset whose value is derived from a contractual claim, such as bank deposits, bonds, and participations in companies' share capital. Financial assets are usually more liquid than other tangible assets, such a ...

s. Ally is one of the largest

companies in the U.S., providing car financing and leasing for 4.5 million customers and originating 1.4 million car loans annually. It is on the

list of largest banks in the United States The following table lists the 100 largest bank holding companies in the United States ranked by total assets of June 30, 2022 per the Federal Financial Institutions Examination Council; their market capitalization is also shown. This list does not ...

by assets and has 2.0 million depositors. Its electronic trading platform has approximately 350,000 funded accounts. The company has sold more than 5 million vehicles, including 270,000 vehicles sold in 2019 via its SmartAuction online marketplace for auto auctions, launched in 2000. The company was known as GMAC, an acronym for General Motors Acceptance Corporation, until 2010.

History

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

market. 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. In 1991, the company was forced to

write-off A write-off is a reduction of the recognized value of something. In accounting, this is a recognition of the reduced or zero value of an asset. In income tax statements, this is a reduction of taxable income, as a recognition of certain expenses ...

$275 million in

bad debt Bad debt, occasionally called uncollectible accounts expense, is a monetary amount owed to a creditor that is unlikely to be paid and for which the creditor is not willing to take action to collect for various reasons, often due to the debtor not ...

as part of a $436 million loss suffered from fraud committed by John McNamara, who ran a Ponzi scheme. In 1998, the company formed

GMAC Real Estate GMAC Real Estate was a real estate franchised broker. It had 13,000 agents. In 2008, it was acquired by Brookfield Asset Management and in 2012, it merged into HomeServices of America. History GMAC Real Estate was founded in 1998, when GMAC (now ...

. In 1999, GMAC Mortgage acquired Ditech. In 2000, the company formed GMAC Bank, a

. In 2005, the company formed

GMAC ResCap GMAC ResCap, Inc. was a residential mortgage loan originator and servicer based in Minneapolis, United States. As a result of its exposure to subprime lending during the subprime mortgage crisis, the company filed for bankruptcy protection in 201 ...

as a holding company for its mortgage operations. In 2006, General Motors sold a 51% interest in GMAC to

Cerberus Capital Management Cerberus Capital Management, L.P. is an American private equity firm,Leaders Magazine"Providing Economic Opportunity: An Interview with The Honorable Dan Quayle, Chairman, Cerberus Global Investments, LLC". specializing in distressed investing. ...

, a

private equity firm A private equity firm is an investment management company that provides financial backing and makes investments in the private equity of startup or operating companies through a variety of loosely affiliated investment strategies including lev ...

. Also that year, GMAC sold a

controlling interest A controlling interest is an ownership interest in a corporation with enough voting stock shares to prevail in any stockholders' motion. A majority of voting shares (over 50%) is always a controlling interest. When a party holds less than the major ...

of GMAC Commercial Holdings (its real estate division renamed Capmark) to Goldman Sachs,

Kohlberg Kravis Roberts KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strate ...

, and Five Mile Capital Partners.

was sold to

Brookfield Asset Management Brookfield Asset Management Inc. is a Canadian multinational company that is one of the world's largest alternative investment management companies, with over US$725 billion of assets under management in 2022. It focuses on direct contro ...

. In 2009, Capmark filed for bankruptcy and its North American loan origination and servicing business was acquired by Berkadia, a

joint venture A joint venture (JV) is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and economic risk, risks, and shared governance. Companies typically pursue joint ventures for one of four rea ...

Leucadia National Jefferies Financial Group Inc. is an American financial services company based in New York City and listed on the Fortune 1000. Investments The company's major holdings are as follows: Financial Services * Jefferies Group (100%) - investment ...

and

Berkshire Hathaway Berkshire Hathaway Inc. () is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from which it invests the float (the retained premiu ...

. On December 24, 2008, the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

accepted the company's application to become a

. In January 2009, the company closed

Nuvell Financial Services Nuvell Financial Services was a subsidiary of GMAC (now Ally Financial) that originated subprime auto loans. In March 2009, the company was shut down by its parent. Nuvell was based in Little Rock, Arkansas, with other offices in Bedford, Texas, J ...

, its subprime lending division. As a result of losses in

, the

United States Department of the Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and ...

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. In April 2009 the bank announced plans to move its Charlotte office from

Ballantyne Ballantyne may refer to: People * Charles Ballantyne (1867–1950), Canadian politician * David Ballantyne (1924–1986), a New Zealand journalist, novelist and short-story writer * Edith Ballantyne (born 1922), Czech-born Canadian executive sec ...

to on four floors of 440 South Church, with possible expansion later. At the time, the bank had 265 Charlotte employees in three business units. In May 2009, GMAC Bank was rebranded as Ally Bank. In May 2010, GMAC re-branded itself as Ally Financial. In September 2010, the company sold its resort finance business to

Centerbridge Partners Centerbridge Partners is a multi-strategy private investment firm focused on leveraged buyouts and distressed securities. The firm manages over $32 billion of assets

. In 2012, the company sold its Canadian banking operations to Royal Bank of Canada for $3.8 billion. In April 2014, it became a

public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...

via an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

. In 2015, it moved its headquarters to One Detroit Center, which was subsequently renamed

Ally Detroit Center Ally Detroit Center, formerly One Detroit Center, is a skyscraper and class-A office building located in Downtown Detroit, overlooking the Detroit Financial District. Rising , the 43-story tower is the tallest office building in Michigan and ...

. In June 2016, the company acquired TradeKing, a stockbrokerage, for $275 million, which was re-branded as Ally Invest. In May 2016, Ally Bank re-entered the mortgage business with the launch of its direct-to-consumer offering called Ally Home. In April 2019, Ally Home partnered with Better.com to launch a digital mortgage platform. In October 2019 Ally announced completion of its acquisition of Health Credit Services (HCS). HCS is a technology-focused patient financing company that is based in

Charlotte, North Carolina Charlotte ( ) is the most populous city in the U.S. state of North Carolina. Located in the Piedmont region, it is the county seat of Mecklenburg County. The population was 874,579 at the 2020 census, making Charlotte the 16th-most populo ...

. On May 3, 2021

Ally Charlotte Center Ally Charlotte Center is a 2-building development in Uptown Charlotte, North Carolina. The office building was officially completed on May 3, 2021, it stands at a height of 378 (115.2). Each floor has an open floor plan and averages approximatel ...

officially the bank occupies 725,000 square of the building and is the only office tenant of the building. All 2,100 Charlotte-based employees and contractors will relocate to the new building from other Charlotte offices, which includes 440 South Church, 11605 N. Community House Road, WeWork space at 128 S. Tryon St, 1401 W. Morehead St, and 2101 Rexford Road. Ally will move into the building in phases as determined by teams. In December of 2021, Ally acquired Fair Square Financial, a credit card company, for $750 million and subsequently rebranded the subsidiary and product as Ally Credit Card.

Sponsorships

The company sponsors the Miami International Auto Show, the ''Time'' Dealer of the Year award, and

The Ally Challenge The Ally Challenge is a PGA Tour Champions event at Warwick Hills Golf and Country Club in Grand Blanc Township, Michigan, just south of Flint, which debuted in September 2018. The tournament is sponsored by Grand Blanc-based McLaren Health Care ...

. In 2019, Ally became the primary sponsor for seven-time NASCAR Cup Series champion

Jimmie Johnson Jimmie Kenneth Johnson (born September 17, 1975) is an American professional auto racing driver. A seven-time NASCAR Cup Series champion, he competes part-time in the series driving for Petty GMS Motorsports. Johnson's seven Cup championships, ...

at Hendrick Motorsports, a sponsorship that runs through 2023. As GMAC, the company previously had primary sponsorships with Hendrick Motorsports from 1998 through 2007 with drivers

Jack Sprague Jack Sprague (born August 8, 1964) is an American former stock car racing driver who has competed in all of NASCAR's three top divisions, most notably in the Craftsman Truck Series, where he won series championships in 1997, 1999 and 2001. Rac ...

Ricky Hendrick Joseph Riddick "Ricky" Hendrick IV (April 2, 1980 – October 24, 2004) was an American stock car racing driver and partial owner at Hendrick Motorsports, a NASCAR team that his father Rick Hendrick founded. He was born in Charlotte, North Ca ...

Brian Vickers Brian Lee Vickers (born October 24, 1983) is an American professional stock car and sports car racing driver. He last drove the No. 14 Chevrolet SS for Stewart-Haas Racing as an interim driver in the NASCAR Sprint Cup Series for the injured ...

and

Casey Mears Casey James Mears (born March 12, 1978) is an American professional off-road and stock car racing driver. He has raced in IndyCar, NASCAR's three national series including 15 seasons in the Cup Series, SCORE International, and the Stadium Super ...

, including Vickers' 2003 NASCAR Busch Series championship victory. Alex Bowman took over the No. 48 Ally Chevrolet in 2021 after Johnson transitioned from NASCAR to the

IndyCar Series The IndyCar Series, currently known as the NTT IndyCar Series under sponsorship, is the highest class of regional North American open-wheel single-seater formula racing cars in the United States, which has been conducted under the auspices o ...

; before the season began, Ally also acquired the

naming rights Naming rights are a financial transaction and form of advertising or memorialization whereby a corporation, person, or other entity purchases the right to name a facility, object, location, program, or event, typically for a defined period of t ...

to the Cup Series' race at

Nashville Superspeedway Nashville Superspeedway is a motor racing complex located in Gladeville, Tennessee, United States (though the track has a Lebanon postal address), about southeast of Nashville. The track was built in 2001 and is currently hosting the Ally 400, ...

to name it the Ally 400. Ally is also a sponsor of the National Women's Soccer League and of a team in Major League Soccer,

Charlotte FC Charlotte FC is an American professional soccer club based in Charlotte. The team competes in Major League Soccer (MLS) as a member of the league's Eastern Conference. The team is owned by David Tepper, who was awarded the expansion franchise ...

. In 2021, Ally continued to sponsor Jimmie Johnson in

IMSA WeatherTech SportsCar Championship The IMSA SportsCar Championship, currently known as the IMSA WeatherTech SportsCar Championship under sponsorship, is a sports car racing series based in the United States and Canada and organized by the International Motor Sports Association (IMS ...

with his No.48 Cadillac DPi-V.R entry in IMSA Michelin Endurance Cup rounds alongside

Kamui Kobayashi is a Japanese professional racing driver who competes in the FIA World Endurance Championship for Toyota Gazoo Racing (GR) and in the Super Formula Championship for KCMG . He previously competed in Formula One, Formula E, the GP2 Series, and ...

and

Simon Pagenaud Simon Pagenaud (born 18 May 1984) is a French professional racing driver. He is contracted to drive the No. 60 Honda for Meyer Shank Racing in the IndyCar Series. After a successful career in sports car racing that saw him taking the top class ...

. Also,

Mike Rockenfeller Mike Rockenfeller (born 31 October 1983), nicknamed "Rocky", is a German professional racing driver and was an Audi factory driver competing in the DTM and the FIA World Endurance Championship. He won his first DTM title in 2013, driving for ...

joined the team for

Rolex 24 at Daytona The 24 Hours of Daytona, also known as the Rolex 24 At Daytona for sponsorship reasons, is a 24-hour sports car endurance race held annually at Daytona International Speedway in Daytona Beach, Florida. It is run on the Sports Car Course layout ...

Legal issues

2013 discrimination settlement

In December 2013, the

Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mo ...

(CFPB) and

United States Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...

ordered the company to pay $80 million in consumer monetary

damages At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognised at ...

and $18 million in

civil penalties A civil penalty or civil fine is a financial penalty imposed by a government agency as restitution for wrongdoing. The wrongdoing is typically defined by a codification of legislation, regulations, and decrees. The civil fine is not considered ...

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 The Equal Credit Opportunity Act (ECOA) is a United States law (codified at et seq.), enacted 28 October 1974, that makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on ...

References

External links

* {{Authority control 1919 establishments in Michigan American companies established in 1919 Banks established in 1919 Companies based in Detroit Banks based in Michigan Companies listed on the New York Stock Exchange Financial services companies of the United States Mortgage lenders of the United States Online banks 2014 initial public offerings Financial services companies established in 1919 Online brokerages