CHARLOTTE -- The banking arm of ailing auto finance company GMAC is taking on a new name, hoping to smooth its image and entice new customers as it works to drive deposit growth.
As of Friday, GMAC Bank has become Ally Bank, which will offer a variety of savings products, including no-penalty certificates of deposits, online savings accounts and money market accounts.
"We are launching a new brand with a new approach of treating customers with total transparency," said GMAC Chief Executive Al de Molina.
The company settled on the name Ally after extensive interviews with customers. "The name Ally aptly fit the character of the brand," said Sanjay Gupta, chief marketing officer.
The company has launched a new website, allybank.com, where customers can open accounts.
The re-branding of the bank, a unit of GMAC Financial Services, is a clear effort to distance itself from its troubled parent, GMAC LLC. GMAC is jointly owned by automaker General Motors and an investor group led by private equity firm Cerberus Capital Management LP.
GMAC was one of 10 financial firms recently ordered by the government to raise more capital. The company needs $11.5 billion, and the most likely source is the government itself. Treasury Secretary Timothy Geithner said last week his department is poised to offer GMAC more help.
The company, which provides financing for both GM dealers and customers, has struggled amid the collapse of the housing and auto markets. Late last year, GMAC became a bank holding company, which enabled it to receive a $5 billion bailout loan from the federal government. Under terms of the bailout, GM and Cerberus both agreed to reduce their stakes in GMAC.
GMAC has since been trying to expand its consumer banking offerings to offset sharp declines in new vehicle loan and home mortgage originations.
The auto industry has struggled amid the global recession, with rising unemployment and dissipating personal wealth leading to sharp declines in auto sales. Chrysler is already in bankruptcy and has announced the closure of a quarter of its dealers. Meanwhile, GM faces a June 1 deadline to complete a restructuring plan to try and avoid winding up in bankruptcy as well. The carmaker is in the midst of notifying 1,100 U.S. dealers that their franchise agreements will not be renewed.
Earlier this week, a bankruptcy judge ruled that GMAC Financial Services can become Chrysler's preferred lender, potentially sending a slew of new business GMAC's way.
GMAC lost $675 million in the first quarter because of the bad economy and losses related to older auto and mortgage loans.