Dedicated to Deposits: Deals, Data, and Discussion

GMAC Reported To Have Agreed to Deposit Rate Limitations

POSTED ON BY

Ally Bank
According to this WSJ article, GMAC (the parent of Ally Bank) is nearing completion of an agreement with the U.S. government for receiving another round of taxpayer money. In addition to the impact to taxpayers, Ally Bank customers may see an effect of this. The article mentioned the following:
As part of the agreement, GMAC agreed to keep interest rates on deposit accounts offered through its banking unit at certain levels, according to people familiar with the situation.

Hopefully, Ally Bank will be allowed to keep interest rates competitive with other internet banks. The FDIC publishes weekly rate caps that are intended for "less than well capitalized institutions." The rate cap for a savings account is currently only 0.96%. The FDIC still doesn't have separate caps for internet banks. I have more on these FDIC rate caps in this May post.

Ally/GMAC Bank's high deposit rates received attention by the American Bankers Association last May, and they complained to the FDIC (see post). In June, GMAC released news on the FDIC's plans to tie GMAC's tapping of funds under a federal debt guarantee program with Ally Bank's deposit rates (see post).

Ally Bank deposit rates have gone down since June, but the rates have remained competitive as compared with other internet banks. It appears Ally Bank has been able to avoid significant limitations on its deposit rates. Hopefully, this will continue. However, if we see big rate cuts, we'll know the cause.

Thanks to the reader who emailed news of this WSJ article.

  Tags: Ally Bank

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Comments
9 Comments.
Comment #1 by marc (anonymous) posted on
marc
Interesting about the rate cap figure, because Imperial Capital Bank is under serious restrictions too for their trouble and yet they are still offering 1.24% on savings. So not sure how it's enforced. But they have gotten the cease and desist order and all the rumblings of a closure and yet still have a rate well over average and over the stated limit.

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Comment #2 by Anonymous posted on
Anonymous
Kinda like price fixing, huh? This Big Bank Con needs to end. You need somebody to watch the watchdogs and then somebody to watch the watchdog's watcher. It's ALL fixed - for maximum bank profits. Break 'em up and open the system to public transparency.

1
Comment #3 by Anonymous posted on
Anonymous
We will find out on Fridays when Ally adjusts their rates, won't we?

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Comment #4 by Anonymous posted on
Anonymous
I am using Ally as a hub anyway, do not care much about their rate.

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Comment #5 by Anonymous posted on
Anonymous
This is one of the few banks that are still advertising on TV recently as rates have dropped. I guess we will start to see fewer of their ads too.

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Comment #6 by Anonymous posted on
Anonymous
I see Ally bank ads on about half the websites that I visit. A very, very heavy, and unsustainable, ad campaign.

They are trying to get as many new customers as they can before they get constrained.

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Comment #7 by Anonymous posted on
Anonymous
Two things to watch out for on Ally Bank's "no-penalty" CD;

1. If you funded it via an ACH transfer and close the CD before 60 days have passed, they will only pay out via ACH transfer to the original financial institution. That is fair since ACH transactions can be rescinded in 60 days.

2. Their process for CD closure is, by some odd coincidence, slow and error-prone. That is *not* fair.

The highly-touted 24x365 phone center can't do the closure themselves - the agent requests the closure from another department (only open 9-5 on business days) that takes a couple of business days to actually initiate the outbound ACH transfer. (ACH transfers usually take two days to complete after they have been initiated - that is not the issue here.)

Rather than fill out a form, the agent sends an email using a template. In my case, the agent's email gave instructions on what to do with the money upon maturity - instead of requesting an immediate closure. The agent knew that I wanted immediate closure - even asked me politely why I was taking the money out.

I called every day to check status. Every day an agent would say that the money would be sent the next day. Eventually one agent looked closely at the email and discovered the first agent's error.

A couple of days later, the unreachable special department finally initiated the ACH transfer.


I am getting out of that bank.

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Comment #8 by Anonymous posted on
Anonymous
I opened an account at a local credit union and called Ally to wire the funds from my money market account to the new credit union account. Ally wanted me to send a form to them first and even if I downloaded the form on line that it would take two hours for them to get to it. So much for trying to wire money out of an Ally account.

Then I wrote a check to open the account. I come to find out that the credit union has put a twenty day hold on the funds availability. They said there was not information on the checks that Ally prints for their customers. There is no address or phone number of the bank. I thought a routing number would be sufficient. I provided the Ally phone number to the credit union, hopefully that helps.

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Comment #9 by Anonymous posted on
Anonymous
"3rd Rescue Considered for GMAC"
http://www.nytimes.com/2009/10/29/business/29gmac.html?hp

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