Ally Bank 2012 Annual Report Download - page 42

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The following table presents the total U.S. consumer origination dollars and percentage mix by product type.
Consumer automotive
financing originations % Share of consumer sales
Year ended December 31, ($ in billions)2012 2011 2010 2012 2011 2010
GM new vehicles
New retail standard $ 6,230 $ 9,009 $ 8,460 16 23 27
New retail subvented 5,960 6,734 6,532 15 17 21
Lease 5,919 5,075 2,954 15 13 9
Total GM new vehicle originations 18,109 20,818 17,946
Chrysler new vehicles
New retail standard 4,431 4,062 3,324 12 10 11
New retail subvented 1,971 2,454 3,893 56 12
Lease 2,380 2,165 891 65 3
Total Chrysler new vehicle originations 8,782 8,681 8,108
Other new retail vehicles 2,178 1,684 736 64 2
Other lease 93 76 43 —— —
Used vehicles 9,581 8,990 4,736 25 22 15
Total consumer automotive financing originations $ 38,743 $ 40,249 $ 31,569
At December 31, 2012, the percentage of U.S. new retail contracts acquired that included rate subvention from GM and Chrysler
decreased as a percentage of total U.S. new retail contracts compared to 2011, primarily driven by lower retail penetration at both GM and
Chrysler in the United States as a result of the continued evolution of our business model. Additionally, both used and non-GM/Chrysler
originations were higher due to the continued strategic focus within these markets. We continue to increase our focus on used vehicle
financing, primarily through franchised dealers. The fragmented used vehicle financing market provides an attractive opportunity that we
believe will further expand and support our dealer relationships and increase our volume of retail loan originations.
Servicing
We have historically serviced all retail contracts and leases we retained on-balance sheet. We historically sold a portion of the retail
contracts we originated and retained the right to service and earn a servicing fee for our servicing functions. Ally Servicing LLC, a wholly
owned subsidiary, performs most servicing activities for U.S. retail contracts and consumer automobile leases.
Servicing activities consist largely of collecting and processing customer payments, responding to customer inquiries such as requests for
payoff quotes, processing customer requests for account revisions (such as payment extensions and rewrites), maintaining a perfected security
interest in the financed vehicle, monitoring vehicle insurance coverage, and disposing of off-lease vehicles. Servicing activities are generally
consistent for our Automotive Finance operations; however, certain practices may be influenced by local laws and regulations.
Our U.S. customers have the option to receive monthly billing statements to remit payment by mail or through electronic fund transfers,
or to establish online web-based account administration through the Ally Account Center. Customer payments are processed by regional third-
party processing centers that electronically transfer payment data to customers' accounts.
Servicing activities also include initiating contact with customers who fail to comply with the terms of the retail contract or lease,
typically via telephone or sending a reminder notice, when an account becomes 3 to 15 days past due. Accounts that become 30 to 45 days
past due are transferred to special collection teams that track accounts more closely. The nature and timing of these activities depend on the
repayment risk of the account.
During the collection process, we may offer a payment extension to a customer experiencing temporary financial difficulty. A payment
extension enables the customer to delay monthly payments for 30, 60, or 90 days, thereby deferring the maturity date of the contract by the
period of delay. Extensions granted to a customer typically do not exceed 90 days in the aggregate during any 12-month period or 180 days in
aggregate over the life of the contract. During the deferral period, we continue to accrue and collect interest on the contract as part of the
deferral agreement. If the customer's financial difficulty is not temporary and management believes the customer could continue to make
payments at a lower payment amount, we may offer to rewrite the remaining obligation, extending the term and lowering the monthly
payment obligation. In those cases, the principal balance generally remains unchanged while the interest rate charged to the customer
generally increases. Extension and rewrite collection techniques help mitigate financial loss in those cases where management believes the
customer will recover from financial difficulty and resume regularly scheduled payments or can fulfill the obligation with lower payments
over a longer period. Before offering an extension or rewrite, collection personnel evaluate and take into account the capacity of the customer
to meet the revised payment terms. Generally, we do not consider extensions that fall within our policy guidelines to represent more than an
insignificant delay in payment and, therefore, they are not considered Troubled Debt Restructurings (TDRs). Although the granting of an
extension could delay the eventual charge-off of an account, typically we are able to repossess and sell the related collateral, thereby
Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10-K