Ally Financial has remained a major auto lender since being spun off from General Motors 14 years ago, but it now faces the prospect of greater competition from the Detroit automaker.
General Motors, which already offers consumer auto loans and leases through its GM Financial arm,
But Ally CEO Jeffrey Brown is shrugging off concern about the possibility that GM, which is still a key Ally partner, will get its own bank charter.
“I never want to criticize somebody else and what they’re going to do, but obviously building a bank is a big task,” Brown said Tuesday at an investor conference.
Ally, formerly known as GMAC, was chartered as industrial loan company in the run-up to the financial crisis of 2008 and 2009 but now operates a state-chartered commercial bank.
Last year, 46% of Ally’s new-vehicle dealer inventory financing involved GM-franchised dealers, as did 26% of the company’s consumer auto financing volume, according to a February regulatory filing. Those percentages were down from 2017, when GM-franchised dealers accounted for 56% of new vehicle dealer inventory financing and 32% of consumer auto financing volume.
Ally has sought to diversify its business in the wake of
Brown said Tuesday that GM Financial’s expected application for a bank charter does not change how Ally sees the company as a competitor. “They do a lot of good business for GM. But for us, we’re focused on what we can control,” he said in remarks at the Goldman Sachs U.S. Financial Services Conference.
GM Financial emerged out of General Motors’ 2010 acquisition of AmeriCredit. Last year, GM Financial had 10,000 U.S. employees at 28 locations across the country, according to a regulatory filing. The unit reported revenue of $14.5 billion in 2019.
The Wall Street Journal reported last month that GM’s banking unit, if approved, would be supervised by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corp. Neither agency has received an application yet. GM has declined to comment.
