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GMAC Bank's Parent Posted Record Losses

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The third quarter was very difficult for GMAC LLC, the parent of GMAC Bank. As Bloomberg reports, both the home-loan unit and the auto finance business reported big losses:
The third-quarter net loss widened to a record $2.52 billion from $1.6 billion a year earlier ... Total net revenue declined 43 percent to $1.72 billion. The Residential Capital home-loan unit lost $1.9 billion during the quarter, and GMAC's auto finance business lost $294 million.

GMAC is hoping that its application to become a bank holding company gets approved so it can participate in the Treasury's Troubled Asset Relief Program (TARP).

The article also mentioned how this is affecting GMAC Bank:
Deposits at GMAC Bank advanced to $17.7 billion during the quarter from $16.9 billion at the end of the second quarter. GMAC is paying above-market interest rates to attract deposits through its bank.

So depositors are benefiting. GMAC Bank is currently paying a very competitive 3.75% APY on its Online Savings Account. GMAC Bank recently removed the minimum balance requirements and monthly service fees on both the Online Savings Account and the Money Market Savings Account. GMAC Bank's CD rates also continue to be very competitive. For more details about these accounts, please see my latest GMAC Bank review.

I've been very happy with my GMAC Bank accounts, so I hope the troubles at GMAC LLC won't adversely affect GMAC Bank. 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.

GMAC Bank's financial ratings for soundness have gone down a bit, but they remain decent: 3 stars (performing) at Bankrate.com and 3.5 stars (good) at BauerFinancial. Both are based on 6/30/08 data. As I recommend with any bank, it's best to keep under the FDIC limits (GMAC Bank's FDIC Certificate # 57803).

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Comments
Anonymous
  |     |   Comment #1
Countrywide Complete Savings down from 3.40%APY to 3.15%APY today
BudgetCents
  |     |   Comment #2
Banking Guy, I agree with you. I have never had an issue with my GMAC bank accounts, they have a very simple and easy to use interface and most time offer competitive rates. Hopefully they will pull through.
BloggingBanks
  |     |   Comment #3
Well you could always ride out the problems with GMAC banks as long as you are within the FDIC insurance limits. The company might even offer competitive CD deals before it goes under( justlike Wamu did with their 5% CD)
Anonymous
  |     |   Comment #4
I agree totally with you about GMAC. Not only do they have a great ACH system but they also have good customer service. I would like to see you do a review of other banks and how they compare to GMAC for ACH Transfers and Customer service.
Anonymous
  |     |   Comment #5
Gmac customer service and ach are by far the best and adding linked account is quick and easy. Plus now their rates are pretty good. Am moving money out of Countrywide to Gmac as Countrywide is no longer competive rate wise but they do have a good system
Anonymous
  |     |   Comment #6
Removed my money from Countrywide. Everything with GMAC, sure hope they pull through this mess.
Anonymous
  |     |   Comment #7
I've kept my eye on GMAC bank and the deal with Cerebrus Capital which has a 51% ownership of the bank and their deal with the FDIC from the end of 2006. That deal is set to expire at the end of the 2008 year. If the FDIC does not extend the deal, the bank could be forced out of the FDIC umbrella or be even possibly liquidated. I still have money in the bank and service has been OK. However, I have moved a major portion of my money to banks that have higher safety ratings. I had money in some of the banks that have reported major losses (even Indymac bank) recently and have closed/will probably close those accounts out within the next year. A higher yield is nice, but the possibility of access issues if the bank is forced to close would not be acceptable to me (which is why Wachovia saw a huge drain in their business customers'
accounts.
Banking Guy
  |     |   Comment #8
There was some concern early in the year that GMAC may be forced to divest GMAC Bank or to terminate the FDIC status. As this MarketWatch article describes, this issue was resolved in July when the FDIC granted GMAC a 10-year waiver.
Anonymous
  |     |   Comment #9
http://cnnwire.blogs.cnn.com/2008/12/10/gmac-at-the-brink/

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