Ally Financial Inc. (Ally) operates as a financial-services company.
The company comprises the nation’s largest all-digital bank and an industry-leading automotive financing and insurance business. The company serves customers with deposits and securities brokerage and investment advisory services, as well as automotive financing and insurance offerings. The company also includes a seasoned corporate finance business that offers capital for equity sponsors and middle-market companies.
Ally is...
Ally Financial Inc. (Ally) operates as a financial-services company.
The company comprises the nation’s largest all-digital bank and an industry-leading automotive financing and insurance business. The company serves customers with deposits and securities brokerage and investment advisory services, as well as automotive financing and insurance offerings. The company also includes a seasoned corporate finance business that offers capital for equity sponsors and middle-market companies.
Ally is registered as a BHC (bank holding company) under the BHC Act (Bank Holding Company Act of 1956, as amended) and an FHC (financial holding company) under the GLB Act (Gramm-Leach-Bliley Act of 1999, as amended).
The company’s primary business lines are Dealer Financial Services, which is composed of its Automotive Finance and Insurance operations, and Corporate Finance. Corporate and Other primarily consists of centralized corporate treasury activities, the management of the company’s consumer mortgage portfolio, the activity related to Ally Invest, Ally Lending, and Ally Credit Card, and reclassifications and eliminations between the reportable operating segments. Consumer mortgage originations will cease during the second quarter of 2025, which will result in a gradual run-off of its remaining consumer mortgage loan portfolio. Additionally, the company entered into a definitive agreement to divest its credit card business.
Within the company’s Automotive Finance and Insurance operations, it is focused on strengthening its network of dealer relationships and increasing engagement. The company leverages its pricing power and sophisticated underwriting for long-term profitability while maintaining an appropriate level of risk appetite. Within Corporate Finance, the company seeks to expand its relationships with private equity sponsors and asset managers. Within the company’s consumer and commercial banking products and services, it is focused on investing in its deposits platform by optimizing the portfolio. At Ally Invest, the company seeks to augment its securities-brokerage and investment-advisory services to more comprehensively assist its customers in managing their savings and growing their wealth.
Business
Dealer Financial Services
Dealer Financial Services is composed of the company’s Automotive Finance and Insurance segments. Its primary customers are automotive dealers, which includes OEM-franchised dealers, non-OEM-franchised dealers with a national presence, and automotive retailers, such as Carvana, CarMax, and EchoPark. A dealer may sell or lease a vehicle for cash but, more typically, enters into a retail installment sales contract or operating lease with the customer and then sells the retail installment sales contract or the operating lease and the leased vehicle, as applicable, to Ally or another automotive finance provider. The purchase by Ally or another provider is commonly described as indirect automotive lending to the customer.
The company’s Dealer Financial Services business is one of the largest full-service automotive finance operations in the country and offers a wide range of financial services and insurance products to automotive dealerships and their customers. The company has deep dealer relationships that have been built throughout its over 100-year history, and it is leveraging competitive strengths to expand its dealer footprint. The company’s business model encourages dealers to use its broad range of products through incentive programs like its Ally Dealer Rewards program. The company’s automotive finance services include purchasing retail installment sales contracts and operating leases from dealers and automotive retailers, extending automotive loans directly to consumers, offering term loans to dealers, financing dealer floorplans and providing other lines of credit to dealers, supplying warehouse lines to automotive retailers, offering automotive-fleet financing, providing financing to companies and municipalities for the purchase or lease of vehicles, and supplying vehicle-remarketing services. The company also offers retail VSCs and commercial insurance primarily covering dealers’ vehicle inventories. It is a leading provider of VSCs, GAP, and VMCs. The company’s dealer-centric business model, value-added products and services, full-spectrum financing, and business expertise proven over many credit cycles, make it a premier automotive finance and insurance company ready to support and strengthen its approximately 21,400 active dealer relationships. A dealer is considered to have an active relationship with the company if it provided automotive financing, remarketing, or insurance services during the three months ended December 31, 2024.
Automotive Finance
The company’s Automotive Finance operations provide U.S.-based automotive financing services to consumers, automotive dealers and retailers, other businesses, and municipalities. Its business model, value-added products and services, full-spectrum financing, and business expertise proven over many credit cycles make it a premier automotive finance company. For consumers, the company provides financing for new and used vehicles. In addition, its CSG provides automotive financing for small businesses and municipalities.
Through the company’s commercial automotive financing operations, it funds purchases of new and used vehicles through wholesale floorplan financing. The company manages commercial account servicing on approximately 2,600 dealers that utilize its floorplan inventory lending or other commercial loans. The extensive infrastructure, technology, and analytics of its servicing operations, as well as the experience of the company’s servicing personnel, enhance its ability to manage its loan losses and enable it to deliver a favorable customer experience to both its dealers and retail customers.
The company’s success as an automotive finance provider is driven by the consistent and broad range of products and services it offers to dealers and automotive retailers. The automotive marketplace is dynamic and evolving, including substantial investments in electrification by automotive manufacturers and suppliers. The company continues to identify and cultivate relationships with automotive retailers, including those with leading e-commerce platforms. It also operates an online direct-lending platform for consumers seeking direct financing. These products will enable the company to respond to the growing trends for a more streamlined and digital automotive financing process to serve both dealers and consumers. Furthermore, the company’s strong and expansive dealer relationships, comprehensive suite of products and services, full-spectrum financing, and depth of experience position it to evolve with future shifts in automobile technologies, including electrification. The company has provided and continue to provide automobile financing for battery-electric and plug-in hybrid vehicles, including brands, such as Tesla, Jeep, Alfa Romeo, and Chevrolet. This positions it to remain a leader in automotive financing as the majority of these vehicles will be sold through dealerships and automotive retailers with whom it has an established relationship. Additionally, the company continues to partner and build relationships with automotive manufacturers who use a direct-to-consumer model.
The company has focused on developing dealer relationships beyond those relationships that primarily were developed through its previous role as a captive finance company for GM and a preferred provider for Stellantis. The company has established relationships with thousands of automotive dealers through its customer-centric approach and specialized incentive programs designed to drive loyalty amongst dealers to its products and services. Outside of GM and Stellantis, the company’s other OEM-franchised dealers include brands, such as Ford, Toyota, Hyundai, Kia, Nissan, Honda, and others, including automotive manufacturers who use a direct-to-consumer model. Its non-OEM-franchised dealers and automotive retailers include used-vehicle-only retailers with a national presence, as well as online-only automotive retailers, such as Carvana, CarMax, and EchoPark.
The company continues to focus on the consumer used-vehicle segment, primarily through franchised dealers and automotive retailers. This has resulted in used-vehicle financing volume growth and has positioned it as an industry leader in used-vehicle financing. Beyond offering a full suite of solutions for its dealership customers, the company also offers application pass-through programs for credit applications that do not meet its underwriting criteria, allowing dealers to provide expanded access to credit for consumers and improve sales at their dealership.
For consumers, the company provides automotive loan financing and leasing for approximately 4.0 million new and used vehicle contracts. Retail financing for the purchase of vehicles by individual consumers generally takes the form of installment sales financing.
The company’s consumer automotive financing operations generate revenue primarily through finance charges on retail installment sales contracts and rental payments on operating lease contracts. For operating leases, when the contract is originated, it estimates the residual value of the leased vehicle at lease termination.
The company’s commercial automotive financing operations primarily fund inventory purchases of new and used vehicles by dealers, commonly referred to as wholesale floorplan financing. This represents the largest portion of its commercial automotive financing business. Wholesale floorplan loans are secured by vehicles financed (and all other vehicle inventory), which provide strong collateral protection in the event of dealership default. Other commercial automotive lending products, consist of automotive dealer revolving lines of credit, term loans, including those to finance dealership land and buildings, and dealer fleet financing. The company also provides comprehensive automotive remarketing services, including the use of SmartAuction, its online auction platform, which efficiently supports dealer-to-dealer and other commercial wholesale vehicle transactions. SmartAuction provides diversified fee-based revenue and serves as a means of deepening relationships with its dealership customers. In 2024, Ally and other parties, including dealers, fleet rental companies, and financial institutions, utilized SmartAuction to sell approximately 556,000 vehicles to dealers and other commercial customers. SmartAuction served as the remarketing channel for 35% of its off-lease vehicles.
Insurance
The company’s Insurance operations offer both consumer finance protection and insurance products sold primarily through the automotive dealer channel in the U.S. and Canada, and commercial insurance products sold directly to dealers in the U.S. The company’s insurance business provides a strong dealer value proposition through its deep industry knowledge, strong service levels, and diversified product suite that complements its automotive finance business in order to drive strong retention rates and help protect and grow the business of its dealer customers. In addition to the company’s product offerings, it provides consultative services and training to assist dealers in optimizing F&I results while achieving high levels of customer satisfaction and regulatory compliance. It also advises dealers regarding necessary liability and physical damage coverages critical to protecting a dealer’s business.
The company is a market leading provider of dealer insurance products and have approximately 5,700 dealer relationships to whom it offers a variety of commercial products and levels of coverage. Vehicle inventory insurance for dealers provides physical damage protection for dealers’ floorplan vehicles that may be financed by Ally, another lender, or may be owned by the dealer. Dealers who receive wholesale financing from it is eligible for insurance incentives, such as automatic eligibility for its preferred insurance programs. During 2024, the company added new inventory insurance relationships, including Nissan and Toyota, and continue to grow its market.
The company’s dealer F&I products are primarily distributed indirectly through the automotive dealer network which includes dealer relationships of approximately 1,500 in the U.S. where it serves 2.4 million consumers. As part of its focus on offering dealers a broad range of consumer F&I products, the company offers VSCs, VMCs, and GAP products. Ally Premier Protection is its flagship VSC offering, which provides coverage for new and used vehicles of virtually all makes and models offering owners and lessees mechanical repair protection and roadside assistance beyond the manufacturer’s new vehicle warranty. The company’s GAP products cover certain amounts owed by a customer beyond their covered vehicle’s value in the event the vehicle is damaged or stolen and declared a total loss. It offers F&I products in Canada, where the company serves approximately 500,000 consumers and are the preferred VSC and other protection plan provider for GM Canada and VSC provider for Subaru Canada. The company’s contract to serve as the preferred VSC and protection plan provider for GM Canada extends into the third quarter of 2027.
The company also underwrites ClearGuard on the SmartAuction platform, which is a protection product designed to minimize the risk to dealers from arbitration claims for eligible vehicles sold at auction. On a smaller scale, it also periodically assumes other non-automotive insurance risks through quota share arrangements and perform services as an underwriting carrier for insurance programs managed by a third party where it cedes the majority of such business to external reinsurance markets.
Corporate Finance
The company’s Corporate Finance operations primarily offer senior-secured loans to private equity sponsor-owned U.S.-based middle-market companies and to well-established asset managers that mostly provide leveraged loans.
The company’s Sponsor Finance business focuses on companies owned by private-equity sponsors with loans typically used for leveraged buyouts, refinancing and recapitalizations, mergers and acquisitions, growth, co-lending arrangements, turnarounds, and debtor-in-possession financings. Additionally, the company’s Lender Finance business provides asset managers and other financing sources with facilities to partially fund their direct-lending activities. It also provides a commercial real estate product, primarily focused on lending to skilled nursing facilities, senior housing, memory care facilities, and medical office buildings. By syndicating loans to other lenders, the company is able to provide financing commitments in excess of its target hold levels and generate loan syndication fee income while reducing single obligor risk exposure. All the company’s loans are floating-rate facilities with maturities typically ranging from two to seven years. In certain instances, it may be offered the opportunity to make small equity investments in its borrowers, which provides an additional revenue opportunity for its business. The portfolio is well diversified across multiple industries, including financials, services, manufacturing distribution, and other specialty sectors. These specialty sectors include technology/venture finance, and defense and aerospace.
Corporate and Other
Corporate and Other primarily consists of centralized corporate treasury activities, such as management of the cash and corporate investment securities and loan portfolios, short- and long-term debt, retail, and brokered deposit liabilities, derivative instruments, original issue discount, and the residual impacts of its corporate FTP and treasury ALM activities. Corporate and Other also includes activity related to certain equity investments, which primarily consist of FHLB and FRB stock, as well as other equity investments through Ally Ventures, its strategic investment business. Additionally, Corporate and Other includes the management of the company’s consumer mortgage portfolio, CRA loans and investments, and reclassifications and eliminations between the reportable operating segments.
Ally Invest
Corporate and Other includes the results of Ally Invest, the company’s digital brokerage and advisory offering, which enables it to complement its competitive deposit products with low-cost investing. The digital advisory business aligns with its strategy to create a premier digital financial services company and provides additional sources of fee income through asset management and certain other fees, with minimal balance sheet utilization. This business also provides an additional source of low-cost deposits through arrangements with Ally Invest’s clearing broker.
Ally Invest offers a broad array of products through a fully integrated digital consumer platform centered around self-directed products and advisory services. Ally Invest’s suite of commission-free and low-cost investing options serve both active and passive investors with diverse and evolving financial objectives through a transparent online process. The company’s digital platform and broad product offerings are enhanced by outstanding client-focused and user-friendly customer service that is accessible via the phone, web, or email.
Ally Invest provides clients with self-directed trading services for a variety of securities, including stocks, options, ETFs, mutual funds, and fixed-income products through Ally Invest Securities. Ally Invest Securities also offers margin lending, which allows customers to borrow money by using securities and cash held in their accounts as collateral.
Ally Invest also provides advisory services to clients through web-based solutions, informational resources, and virtual interaction through Ally Invest Advisors, an SEC-registered investment advisor. Ally Invest Advisors provides clients the opportunity to obtain professional portfolio management services in return for a fee based upon the client’s assets under management. In addition to customized advice from personal advisors, the company offers cash enhanced portfolios that incur no management fee, and a number of core robo portfolios, which hold ETFs diversified across asset class, industry sector, and geography and which are customized for clients based on risk tolerance, investment time horizon, and wealth ratio.
Ally Credit Card
Financial information related to the company’s credit card business, Ally Credit Card, is included within Corporate and Other. Ally Credit Card is its digital-first credit card platform that features leading-edge technology, and a proprietary, analytics-based underwriting model.
Deposits
The company is focused on growing and retaining a stable deposit base and deepening relationships with its 3.3 million primary deposit customers by leveraging its compelling brand and strong value proposition. Ally Bank is a digital direct bank with no branch network that obtains retail deposits directly from customers. Ally Bank is the largest online only bank in the United States as measured by retail deposit balances.
The company’s deposit products and services are designed to develop long-term customer relationships and capitalize on the shift in consumer preference for direct banking. Ally Bank offers a full spectrum of retail deposit products, including savings accounts, money-market demand accounts, CDs, interest-bearing spending accounts, trust accounts, and IRAs. Its deposit services include Zelle person-to-person payment services, eCheck remote deposit capture, and mobile banking. The company’s Smart Savings Tools further demonstrates the ability to deliver innovative digital tools on top of traditional financial products to add incremental value to customers, while also driving increased engagement and loyalty.
The company is well-positioned to continue to benefit from the consumer-driven shift from branch banking to direct banking as demonstrated by the growth it has experienced since 2010. It had 3.3 million deposit customers and 6.3 million retail bank accounts as of December 31, 2024. The company’s customer base spans across diverse demographic segmentations and socioeconomic bands. The company’s direct bank business model resonates particularly well with the millennial and younger generations, which consistently make up the largest percentage of its new customers.
The company is focused on growing, deepening, and further leveraging the customer relationships and brand loyalty that exist with Ally Bank as a catalyst for future loan and deposit growth.
Mortgage
Corporate and Other includes the financial results of the company’s mortgage operations, which consist of its held-for-sale and held-for-investment consumer mortgage loan portfolios. During 2024, the company shifted to prioritize held-for-sale loan originations in its mortgage operations.
Through the company’s direct-to-consumer channel, it offers a variety of competitively priced jumbo and conforming fixed- and adjustable-rate mortgage products through a third party. Loans originated in the direct-to-consumer channel are sourced by existing Ally customer marketing, prospect marketing on third-party websites, and email or direct mail campaigns. During the year ended December 31, 2024, it originated $930 million of mortgage loans through its direct-to-consumer channel.
Through the bulk loan channel, the company purchases loans from several qualified sellers, including direct originators and large aggregators who have the financial capacity to support strong representations and warranties, and the industry knowledge and experience to originate high-quality assets. Bulk purchases are made on a servicing-released basis, allowing it to directly oversee servicing activities and manage refinancing through its direct-to-consumer channel.
Credit Strategy
The company’s strategy and approach to extending credit, as well as its management of credit risk, are critical elements of its business.
Investment Securities
As of December 31, 2023, the company’s investment portfolio included debt securities, such as the U.S. Treasury and federal agencies; U.S. States and political subdivisions; foreign government securities; agency mortgage-backed residential securities; mortgage-backed residential securities; agency mortgage-backed commercial securities; asset-backed securities; and corporate debt securities.
Dispositions
On December 31, 2023, the company committed to sell Ally Lending, a component of its Corporate and Other segment. The company closed the sale of Ally Lending on March 1, 2024.
Regulation and Supervision
The company is also subject to direct supervision and periodic examinations by various governmental agencies and industry SROs that are charged with overseeing the kinds of business activities in which it engages, including the FRB, the UDFI, the FDIC, the CFPB, the SEC, FINRA, and a number of state regulatory and licensing authorities, such as the NYDFS.
Ally and IB Finance, a Delaware limited liability company, are BHCs under the BHC Act, and Ally has elected to be an FHC under the GLB Act. IB Finance is a direct subsidiary of Ally and the direct parent of Ally Bank, which is a commercial bank that is organized under the laws of the State of Utah and whose deposits are insured by the FDIC under the FDI Act. As BHCs, Ally and IB Finance are subject to regulation, supervision, and examination by the FRB. Ally Bank is a member of the Federal Reserve System and is subject to regulation, supervision, and examination by the FRB, the UDFI, the FDIC, and the CFPB.
Ally is subject to enhanced prudential standards that have been established by the FRB under the Dodd-Frank Act, as amended by the EGRRCP Act and as applied to Category IV firms under rules of the U.S. banking agencies that tailor how the enhanced prudential standards apply across large banking organizations (the Tailoring Rules).
Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W prevent Ally and its nonbank subsidiaries from taking undue advantage of the benefits afforded to Ally Bank as a depository institution, including its access to federal deposit insurance and the FRB’s discount window.
The UDFI and the FDIC have similarly expansive authorities and powers over Ally Bank and its subsidiaries.
Ally Bank’s deposits are insured by the Federal Deposit Insurance Corporation (FDIC) in the standard insurance amounts per depositor for each account ownership category as prescribed by the Federal Deposit Insurance Act, as amended (FDI Act).
Ally Invest Securities LLC (Ally Invest Securities) is registered as a securities broker-dealer with the SEC and in all 50 states, the District of Columbia, and Puerto Rico, is registered with the Municipal Securities Rulemaking Board as a municipal securities broker-dealer and is a member of Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC).
Ally Invest Advisors Inc. (Ally Invest Advisors) is registered as an investment adviser with the SEC. As a result, the firm is subject to a host of requirements governing investment advisers and their personnel under the Investment Advisers Act of 1940, as amended, and related rules and regulations, including certain fiduciary and other obligations with respect to its relationships with its investment advisory clients.
Some of the other more significant laws to which the company is subject include: the GLB Act and related regulations; the CFPB; Section 13 of the BHC Act and its implementing regulations (commonly referred to as the Volcker Rule); the Equal Credit Opportunity Act, the Fair Housing Act, and similar fair-lending laws (collectively, Fair Lending Laws); the Fair Credit Reporting Act; the Truth in Lending Act (TILA) and Regulation Z; the Bank Secrecy Act, as amended by the USA PATRIOT Act; and the CRA.
History
Ally Financial Inc. was founded in 1919.
