The banking unit of ailing auto financer GMAC is changing its name. Starting today, GMAC Bank becomes Ally Bank -- not to be confused with the over-the-counter weight loss drug, Alli (although after losing $675 million in the first quarter, the name similarity might be appropriate. Pundits are already quipping that it should have been changed to "Alley" Bank instead.)
"We are launching a new brand with a new approach of treating customers with total transparency," said GMAC Chief Executive Al de Molina in a statement.
The company chose the new name after extensive interviews with customers. It has launched allybank.com, where customers can open accounts. The Web site says Ally was "built on the foundation of GMAC Financial Services. And with that experience we've learned that these times demand change and a new way of doing business. So we're taking banking in a new direction."
The Web site assures: "We're a bank that values integrity as much as deposits. A bank that will always be open, accountable, and honest. Yes, honest. We won't deal in half-truths, kindatruths, or truths only buried in fine print. That's because we don't have anything to hide. We're always going to give it to you straight."
Ally promises no monthly fees, no minimum deposits and no minimum balances. Part of "doing it right," according to the Web site, "means developing new products that give you more options, like our No Penalty CD that lets you withdraw your money if you need to. And it means keeping our promise that our rates will always be among the top. It's just the right thing to do."
The re-branding of the bank, a unit of GMAC Financial Services, is likely an effort to distance itself from its troubled parent, GMAC LLC. GMAC is jointly owned by automaker General Motors and an investor group led by private equity firm Cerberus Capital Management LP (which acquired Chrysler in 2007.)
GMAC, set up in 1919 to provide financing to buyers of GM vehicles, initially was an acronym for General Motors Acceptance Corp. It was one of 10 financial firms recently ordered by the government to raise more capital.
Late last year, GMAC became a bank holding company, which enabled it to receive a $5 billion bailout loan from the federal government. Under terms of the government bailout, GM and Cerberus both agreed to reduce their stakes in GMAC.
Earlier this week, a bankruptcy judge ruled that GMAC Financial Services can become Chrysler's preferred lender, which results in a new source of customers.