What the changes say
- Ally Financial added new risks covering artificial intelligence adoption, conflicting climate disclosure mandates, and anti-takeover provisions.
What changed since the prior 10-K
New
- NewRisks Related to Regulation and Supervision
Furthermore, in recent years, there has been increasing divergence in how government and policy makers are approaching these issues. See the risk factor above, titled Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policies
Conflicting state and federal laws regarding climate disclosures and sustainability considerations create regulatory compliance challenges.
- NewRisks Related to Our Business
Ally and Ally Bank continue to access the securitization markets. However, there can be no assurances that these sources of liquidity will remain available to us particularly during periods of financial instability
Liquidity in securitization markets may become unavailable during financial instability, risking forced asset sales or going concern threats.
- NewRisks Related to Our Business
The development and use of AI is rapidly evolving and our failure to appropriately evaluate, adopt, govern, or effectively integrate AI where beneficial could adversely affect us
Failure to properly adopt, integrate, or govern rapidly evolving artificial intelligence tools could cause lost productivity and market share.
- NewRisks Related to Our Business
Climate-related risks could adversely affect our business, operations, and reputation
Physical and transition climate risks could increase customer loan delinquencies and credit losses.
- NewRisks Related to Ownership of Our Common Stock
The market price of our common stock could be adversely impacted by anti-takeover provisions in our organizational documents and Delaware law that could delay or prevent a takeover attempt or CIC of Ally or by other banking, antitrust, or corporate laws that have or are perceived as having an anti-takeover effect
Organizational anti-takeover provisions and Delaware law may hinder or delay acquisition attempts and change in control events.
Dropped
- DroppedRisks Related to Regulation and Supervision
Requirements under U.S. Basel III that increased the quality and quantity of regulatory capital and future revisions to the Basel III framework or requirements related to long-term debt may adversely affect our business and financial results
- DroppedRisks Related to Our Business
Weak or deteriorating economic conditions, failures in underwriting, changes in underwriting standards, financial or systemic shocks, or continued growth in our nonprime or used vehicle financing business could increase our credit risk, which could adversely affect our business and financial results
- DroppedRisks Related to Our Business
loan charge-offs based on judgments different than those of management. If these differences in judgment are considerable, our allowance could meaningfully increase and result in a sizable decrease in our net income and capital
- DroppedRisks Related to Our Business
Ally and Ally Bank continue to access the securitization markets. While those markets have stabilized following the liquidity crisis that commenced in 2007–2008, there can be no assurances that these sources of liquidity will remain available to us
- DroppedRisks Related to Our Business
Climate change could adversely affect our business, operations, and reputation
Reworded
- 95% rewrittenRisks Related to Regulation and Supervision
Our business and financial results may be negatively affected by governmental actions related to climate and other sustainability-related matters
Updated to align with new political and governmental climate risk disclosures and divergent state-level sustainability mandates.
Was: Our business and financial results may be negatively affected by governmental actions related to climate and other sustainability issues
- 82% rewrittenRisks Related to Our Business
Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to significantly increase our allowance, which may adversely affect our financial condition and results of operations
Clarified that regulatory reviews and differing judgments on CECL allowance models could cause sizable decreases in net income and capital.
- 68% rewrittenRisks Related to Our Business
Our business and financial results are dependent upon overall U.S. automotive industry sales volume
Added vehicle affordability and future volume declines to the economic and market conditions impacting auto sales volume.
- 57% rewrittenRisks Related to Our Business
The financial system is highly interrelated, and the failure of even a single financial institution or other participant in the financial system could adversely affect us
Retained core financial system interrelatedness and counterparty risk disclosures without substantive operational changes.
- 45% rewrittenRisks Related to Our Business
Significant fluctuations in the valuation of investment securities or market prices could negatively affect our financial results
Retained core valuation fluctuations for investment securities and nonmarketable equity investments without substantive changes.
- 45% rewrittenRisks Related to Our Business
Vehicle loans and operating leases make up a significant part of our earning assets, and our business and financial results could suffer if used vehicle prices are low or volatile or decrease in the future beyond our expectation
Updated earning asset exposure figure to approximately 60% for 2025 and added OEM prioritization of EV versus gas vehicles.
- 42% rewrittenRisks Related to Our Business
Our non-deposit borrowing costs and access to the banking and capital markets could be negatively impacted if our credit ratings are downgraded or otherwise fail to meet investor expectations
Updated credit rating agency references to include DBRS and clarified specific consequences of ratings downgrades on borrowing costs.
- 41% rewrittenRisks Related to Ownership of Our Common Stock
Our ability to pay dividends on our common stock or repurchase shares in the future may be limited
Added a cross-reference to Regulation and Supervision regarding dividend and share repurchase limitations.
- 38% rewrittenRisks Related to Our Business
Our business is centered around lending and banking with an emphasis on our digital platform, and a significant percentage of our assets are composed of loans, operating leases, and securities. As a result, in the ordinary course of business, credit risk is one of our most significant risks
- 36% rewrittenRisks Related to Our Business
Our business requires substantial capital and liquidity, and a disruption in our funding sources or access to the capital markets may have an adverse effect on our liquidity, capital positions, and financial condition
- 34% rewrittenRisks Related to Regulation and Supervision
Ally Financial Inc. • Form 10-K
- 34% rewrittenRisks Related to Regulation and Supervision
The regulatory and supervisory environment in which we operate could have an adverse effect on our business, financial condition, results of operations, and prospects
- 32% rewrittenRisks Related to Regulation and Supervision
Legislative or regulatory initiatives on cybersecurity and data privacy could adversely impact our business and financial results
- 32% rewrittenRisks Related to Our Business
We rely extensively on third-party service providers in delivering products and services to our customers and otherwise conducting our business and operations, and their failure to perform to our standards or other issues of concern with them could adversely affect our reputation, business, and financial results
- 30% rewrittenRisks Related to Regulation and Supervision
Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policies
- 28% rewrittenRisks Related to Our Business
We use estimates and assumptions in determining the value or amount of many of our assets and liabilities. If our estimates or assumptions prove to be incorrect, our cash flow, profitability, financial condition, and prospects could be adversely affected
- 28% rewrittenRisks Related to Our Operations
We are heavily reliant on technology, and a failure in effectively implementing technology initiatives, anticipating future technology needs or demands, or maintaining rights or interests in associated intellectual property could adversely affect our business or financial results
- 25% rewrittenRisks Related to Our Business
GM and Stellantis dealers and their retail customers continue to constitute a significant portion of our customer base, which creates concentration risk for us
- 24% rewrittenRisks Related to Our Business
The markets for automotive financing, insurance, banking, brokerage, and investment advisory services are extremely competitive, and competitive pressures could adversely affect our business and financial results
- 23% rewrittenRisks Related to Our Business
Our indebtedness and other obligations are significant and could adversely affect our business and financial results
- 22% rewrittenRisks Related to Our Business
We have dealer-centric automotive finance and insurance businesses, and a change in the key role of dealers within the automotive industry or our ability to maintain or build relationships with them could have an adverse effect on our business, results of operations, financial condition, or prospects
All 45 risk factors
Headings as the filing states them, in filing order.
Risks Related to Regulation and Supervision
- 01The regulatory and supervisory environment in which we operate could have an adverse effect on our business, financial condition, results of operations, and prospects34% rewritten
- 02Ally Financial Inc. • Form 10-K34% rewritten
- 03Our ability to execute our business strategy for Ally Bank may be adversely affected by regulatory constraints
- 04We are currently subject to enhanced prudential standards that have been established by the FRB. Under the Tailoring Rules, Ally is a Category IV firm and, as such, is generally subject to supervisory stress testing on a two-year cycle and is required to submit an annual capital plan to the FRB
- 05Our ability to rely on deposits as a part of our funding strategy may be limited
- 06Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policies30% rewritten
- 07If our ability to receive distributions from subsidiaries is restricted, we may not be able to satisfy our obligations to counterparties or creditors, make dividend payments to shareholders, or repurchase our common stock
- 08Legislative or regulatory initiatives on cybersecurity and data privacy could adversely impact our business and financial results32% rewritten
- 09Our business and financial results may be negatively affected by governmental actions related to climate and other sustainability-related matters95% rewritten
- 10Furthermore, in recent years, there has been increasing divergence in how government and policy makers are approaching these issues. See the risk factor above, titled Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policiesNew
Risks Related to Our Business
- 11Our business is centered around lending and banking with an emphasis on our digital platform, and a significant percentage of our assets are composed of loans, operating leases, and securities. As a result, in the ordinary course of business, credit risk is one of our most significant risks38% rewritten
- 12Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to significantly increase our allowance, which may adversely affect our financial condition and results of operations82% rewritten
- 13We have dealer-centric automotive finance and insurance businesses, and a change in the key role of dealers within the automotive industry or our ability to maintain or build relationships with them could have an adverse effect on our business, results of operations, financial condition, or prospects22% rewritten
- 14GM and Stellantis dealers and their retail customers continue to constitute a significant portion of our customer base, which creates concentration risk for us25% rewritten
- 15Our business and financial results are dependent upon overall U.S. automotive industry sales volume68% rewritten
- 16Vehicle loans and operating leases make up a significant part of our earning assets, and our business and financial results could suffer if used vehicle prices are low or volatile or decrease in the future beyond our expectation45% rewritten
- 17The levels of or changes in interest rates could affect our results of operations and financial condition
- 18We rely extensively on third-party service providers in delivering products and services to our customers and otherwise conducting our business and operations, and their failure to perform to our standards or other issues of concern with them could adversely affect our reputation, business, and financial results32% rewritten
- 19We are or may be subject to potential liability in connection with pending or threatened legal proceedings and other matters, which could adversely affect our business or financial results
- 20Our inability to attract, retain, or motivate qualified employees could adversely affect our business or financial results
- 21Our business requires substantial capital and liquidity, and a disruption in our funding sources or access to the capital markets may have an adverse effect on our liquidity, capital positions, and financial condition36% rewritten
- 22Ally and Ally Bank continue to access the securitization markets. However, there can be no assurances that these sources of liquidity will remain available to us particularly during periods of financial instabilityNew
- 23Our indebtedness and other obligations are significant and could adversely affect our business and financial results23% rewritten
- 24Our non-deposit borrowing costs and access to the banking and capital markets could be negatively impacted if our credit ratings are downgraded or otherwise fail to meet investor expectations42% rewritten
- 25The markets for automotive financing, insurance, banking, brokerage, and investment advisory services are extremely competitive, and competitive pressures could adversely affect our business and financial results24% rewritten
- 26Challenging business, economic, or market conditions may adversely affect our business, results of operations, and financial condition
- 27Geopolitical conditions, government shutdowns, military conflicts, acts or threats of terrorism, natural disasters, pandemics, disruptions in the economy caused by geopolitical events and related sanctions, and other conditions or events beyond our control could adversely affect us
- 28Our hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results
- 29We use estimates and assumptions in determining the value or amount of many of our assets and liabilities. If our estimates or assumptions prove to be incorrect, our cash flow, profitability, financial condition, and prospects could be adversely affected28% rewritten
- 30Significant fluctuations in the valuation of investment securities or market prices could negatively affect our financial results45% rewritten
- 31Changes in accounting standards could adversely affect our reported revenues, expenses, profitability, and financial condition
- 32The financial system is highly interrelated, and the failure of even a single financial institution or other participant in the financial system could adversely affect us57% rewritten
- 33Adverse economic conditions or changes in laws in the states where we have loan or operating lease concentrations may negatively affect our business and financial results
- 34The development and use of AI is rapidly evolving and our failure to appropriately evaluate, adopt, govern, or effectively integrate AI where beneficial could adversely affect usNew
- 35Negative publicity outside of our control, or our failure to successfully manage issues arising from our conduct or in connection with the financial services industry generally, could damage our reputation and adversely affect our business or financial results
- 36Our failure to meet stakeholder expectations on sustainability-related issues could result in reputational harm, a loss of customer and investor confidence, and adverse business and financial results
- 37Climate-related risks could adversely affect our business, operations, and reputationNew
Risks Related to Our Operations
- 38We face a wide array of security risks that could result in business, reputational, financial, regulatory, and other harm to us
- 39Our operating systems or infrastructure, as well as those of our service providers or others on whom we rely, could fail or be interrupted, which could disrupt our business and adversely affect our results of operations, financial condition, and prospects
- 40We are heavily reliant on technology, and a failure in effectively implementing technology initiatives, anticipating future technology needs or demands, or maintaining rights or interests in associated intellectual property could adversely affect our business or financial results28% rewritten
- 41Our enterprise risk-management framework or independent risk-management function may not be effective in mitigating risk and loss
- 42Our business and operations make extensive use of models and certain other qualified tools, and we could be adversely affected if our design, implementation, or use of models and certain other qualified tools are flawed
Risks Related to Ownership of Our Common Stock
- 43Our ability to pay dividends on our common stock or repurchase shares in the future may be limited41% rewritten
- 44The market price of our common stock could be adversely impacted by anti-takeover provisions in our organizational documents and Delaware law that could delay or prevent a takeover attempt or CIC of Ally or by other banking, antitrust, or corporate laws that have or are perceived as having an anti-takeover effectNew
- 45These provisions, alone or together, could delay hostile takeovers and CIC of Ally or changes in management
Other Ally Financial 10-Ks
- FY2024 10-K risk factors45 risks
Ally Financial relies heavily on retail deposits for 89 percent of its funding while operating as a digital bank without branches. Automotive finance tied to GM and Stellantis dealers creates significant industry and brand concentration risk. Used vehicle prices and interest rate fluctuations heavily impact net interest income and earning assets.
Filed Feb 19, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.