[GMAC has] sweetened terms on a debt swap designed to save the firm from bankruptcy and extended the deadline for a fourth time to lure more investors. ... Without the swap, GMAC has said its application to become a bank will fail, and analysts have said bankruptcy would likely follow
Lehman Brothers Bank
I'm not sure how all of these problems at GMAC will affect GMAC Bank. If GMAC files for bankruptcy, it's quite possible that GMAC Bank will continue without changes. That is was happened at Lehman Brothers Bank, FSB which is a subsidiary of Lehman Brothers. I emailed Lehman Brothers Bank yesterday, and here is the reply I received:
Lehman Brothers Bank, FSB is not included in the bankruptcy. The bank is operating as normal.
I reported on Lehman Brothers Bank in September 2007 when it was offering very competitive CD rates. The rates have remained low this year, even after the Lehman Brothers bankruptcy. The bank remains FDIC insured.
GMAC Bank's Latest Ratings for Soundness
GMAC Bank's ratings for soundness have recently changed a little:
- BauerFinancial: 3 stars (adequate) based on 9/30/08 data vs. 3.5 stars (good) based on 6/30/08 data
- Bankrate.com: 4 stars (sound) based on 9/30/08 data vs. 3 stars (performing) based on 6/30/08 data.
Risks for GMAC Bank Depositors
If you're a GMAC Bank depositor and you have under the FDIC insured limits, the ratings are not really important. GMAC Bank is FDIC insured (FDIC Certificate # 57803). Two common misconceptions that I hear over and over are the risk to accrued interest and the risk of delayed access. FDIC insures both the principal and the accrued interest. When a bank closes, you typically have access to your account from the acquiring bank on the next business day. When IndyMac and WaMu closed this year, I was able to access my online accounts as normal the next business day. There can be some delays if you're using POD accounts to extend your coverage or if you have brokerage deposits. For more FDIC info, please refer to my FDIC post on recent coverage changes.
There's no risk of losing your insured deposits, but there are some minor risks when a bank fails. As we've seen this year when banks like WaMu are closed, there's a good chance that the savings account rates may go down significantly after the new bank takes control. There's also a chance that the new bank may decide not to honor the failed bank's CD rates. You still have the option to close the CD without any early withdrawal penalty.
My Experience with GMAC Bank
I've been very happy with my GMAC Bank accounts. Besides the high rates, the best part of GMAC Bank has been their ACH transfer system. I can easily add links to many other external accounts. Transfers are fast (often completing in one or two days), and hold times are no more than two days. For more details about these accounts, please see my GMAC Bank review.