After repeated bailouts, GMAC Bank last month changed its name to Ally Bank. A great branding move—why wouldn’t you want to deposit your money in a bank that’s your ally, especially when it pays the highest interest rate in the nation on a 12-month CD?
To the right is the bank’s ad in today’s WSJ. Page A5.
Where’s Sheila Bair and the FDIC with its new interest rate restrictions for weak banks? Surely GMAC/Ally fits the criteria. Heck, even the American Bankers Association is unhappy. They’ve complained to FDIC that GMAC/Ally is unfairly exploiting its privileged position as a “too-big-to-fail” lender.*
Actually a better solution than regulating interest rates offered by banks would be to abolish public deposit insurance entirely.
*”too-important-to-fail” is probably more accurate. GMAC is a primary source of credit to buy cars. As such, it’s become one of the administration’s slush funds to pump bailout dollars to a favored constituency…in this case the auto sector and its union workers…