GMAC LLC, stung by billions of dollars in losses at its auto finance and mortgage units, on Friday scrapped its own name from its banking unit, which it will now call Ally Bank in an effort to gain customers.With that sort of negative stigma, you can see the rush to change their name.
Sanjay Gupta, the bank's chief marketing officer, said the company wanted a name that would help it shed the baggage that many Americans now associate with banks, which have taken hundreds of billions of dollars of taxpayer money after losses from bad loans and investments piled up.
"We fully expect more customers will use us," Gupta said in an interview.
GMAC's conversion to a bank holding company in December was a central part of the Detroit-based company's survival plan, and allowed it to get access to new government funding.
While GMAC got a $6 billion bailout in December, including $5 billion from the Troubled Asset Relief Program, regulators ordered it last week to plug an $11.5 billion capital shortfall to protect itself in case of a severe recession.
Nineteen large banks underwent government "stress tests," and of the 10 told to raise capital, GMAC had by far the biggest shortfall relative to its size"
From the Ally Bank web site:
Who we are: "We are Ally Bank, 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."Lets hope the "new direction" includes responsible lending to people who can pay back the loans.