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What Happens If Ally Bank Buys ING Direct?

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Allying DirectLast week, there was news about Ally Bank in talks to buy ING Direct. It would be a marriage of my two favorite online banks*.

The biggest question I had, as a customer of both, is what should I expect after an acquisition. I know it’s still early but I’m curious to know, so I called Greg McBride of Bankrate, one of the most knowledgeable people I know, and he gave me a good idea of what to expect (if anything, many times these “talks” become nothing).

* I feel like I have to qualify why I like the two banks. ING Direct rocks because their website is dead simple to use, chock full of features, and because they’re basically the grandfather and archtype for online savings accounts. Ally Bank is the young gun and much newer, but you really can’t beat a 60 day early termination penalty on their certificates of deposit. The website is good, not nearly as great as ING Direct, and both their rates are about average now.

He basically told me that when it comes to traditional mergers, there are two varieties. The first is when a bank buys another bank in an area they already do business – this is so the acquiring bank increases their market share. The second is when a bank expands into a new area through acquisition, like a West Coast bank buying an East Coast bank. What’s unique about this situation is that this is a merger of online banks, so in a sense it’s a variety of the first type.

In this case, since it’s an amicable acquisition (instead of an FDIC sponsored “let’s save this sinking ship” bank failure), you should look at it like any other regular acquisition. It’s more like Southwest buying Airtran than JP Morgan buying Washington Mutual. They’ll announce the sale, it’ll take months to process, and pretty much nothing will change quickly. Greg made the excellent point that since Ally will probably pay a premium (as opposed to a discount, which is often the case in bank failures) so they’ll try their hardest to keep all those depositors. You won’t see rates changing because of the acquisition, though they’ll invariably change because of the economic environment, and chances are it’ll be a slow migration. As anyone with a Bank of America account knows, mergers take a long time… (BoA has at least a dozen ABA routing numbers)

After these last few years of banks acquisitions fueled by bank failures, it’s a little refreshing to hear about a potential sale of two strong banks.

I wrote this post entirely so I could reuse my Allying Direct logo.

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8 Responses to “What Happens If Ally Bank Buys ING Direct?”

  1. Levon says:

    I really like Ally Bank b/c of their clean website and their branding. It feels nice to bank with them…I think of them as the “Apple” of online banks if that makes any sense. I hope the merger goes well and provides more value to their customers and doesn’t make them into an inflexible giant.

  2. eric says:

    Allying Direct LOL…good stuff Jim.

    I would like to see Ally bring their CD terms and scanned check depositing over to ING. That would be the best of both worlds for me.

  3. Strebkr says:

    I would love the ability to do check scanning. Thats one of the last reasons I have Chase still. Tons of ATMs to make my deposits at (No iphone)

    It would be nice if they took the best of all the features to make the new bank. We will have to see if that is sustainable.

  4. zapeta says:

    I agree with the others that a combination of these two banks could really be great for consumers. If Ally brings over scanned checks, their CD terms, and retains the good parts of ING they will be a great bank.

  5. Ovel says:

    Lets not get too excited. Remember Ally Bank is the old GMAC a company which received billions in federal aid to avoid bankruptcy.

  6. John says:

    I for one hope this doesn’t happen. I tried to open an account with Ally Bank, but they refused to give me an account unless I thawed my credit files so they could do a credit-damaging credit check. ING Direct let me open an account without any issues. Aside from its inconvenient security features (weeklong holds on deposits and log in questions), I’ve been happy with ING Direct.

    I’m so sick of financial institutions using the Patriot Act as an excuse to check my credit files when I’m not even asking for credit. Information is valuable, and they’re out to gather as much of it about you as possible it seems.

    • DRT says:

      That Patriot Act you dislike is a protection for this country. It protects you against identity fraud and terrorists. That act is to verify your identity. Not check your credit. If you’ve frozen your credit, then I would say you possibly have had your identity stolen. Then you should be able to relate.

  7. skylog says:

    i personally will hate the loss of instant transfers to sharebuilder and perhaps the loss of “multiple accounts.” i am not certain how or if Ally deals with these.


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