February 13, 2020

Joseph Vitale, Esq.

Schulte Roth & Zable LLP

919 Third Avenue

New York, New York 10022

Dear Mr. Vitale: 

 This letter responds to your request dated November 21, 2019, on behalf of 

Stephen A. Feinberg and Cerberus Capital Management, L.P. (“CCM”) (collectively, 

“Cerberus”), and affiliated entities of Cerberus that had directly or indirectly invested in 

equity interests of Ally Financial, Inc. (“Ally”) (formerly, GMAC LLC), Detroit, 

Michigan (“affiliated entities”),for relief from passivity commitments made to the Board 

on December 23, 2008, which were subsequently amended or modified (the “Passivity 

Commitments”). The Passivity Commitments were made in connection with the Board’s 

approval of an application by Ally to become a bank holding company on the conversion 

of Ally Bank (formerly, GMAC Bank) from an industrial loan company to a commercial 

bank on December 24, 2008,1 and with the Board’s non-control determination letter 

issued on March 24, 2009.2

 The Passivity Commitments were intended to ensure that

1

 In addition, due to Cerberus’s extensive business relationships with, and ownership 

interests in, Ally, Cerberus also provided supplemental transitional commitments to the 

Board on December 23, 2008, which specified a date by which Cerberus had to comply

with certain Passivity Commitments (“Transitional Commitments”). Thus, the 

Transitional Commitments were intended to provide limited relief from the Passivity 

Commitments to allow Cerberus adequate time to divest a significant portion of its Ally 

shares and to terminate all employee and certain director interlocks. Cerberus divested 

the required amount of stock and terminated the required business relationships in 2009. 

Because the time period referenced in the Transitional Commitments expired in 2009, 

these commitments have long since been considered moot.

2

 On March 24, 2009, the Board issued a letter determining that Mr. Feinberg and the 

entities he controlled that held equity interests in Ally (including CCM) would not be 

deemed to control Ally under the Bank Holding Company Act of 1956 (“BHC Act”), in 

reliance on the completion of a number of conditions described in the letter. Consistent 

... oi/c"oy ... . . . . . . . . . . 

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 

WASHI NGTO N , DC 20551 

www.federa I reserve .gov 
- 2 - 

Cerberus and the affiliated entities would not exercise a controlling influence over Ally

for purposes of the BHC Act. The requested relief would completely relieve Cerberus

and the affiliated entities from the Passivity Commitments.

Cerberus represents that all of the shares of Ally held by Cerberus and the 

affiliated entities had been fully divested by November 28, 2016; no trusts or entities 

controlled by Mr. Feinberg currently own or control any shares of Ally; and Cerberus is 

not aware of any CCM-controlled portfolio company3 that currently owns or controls any 

shares of Ally.

4

 Other than two CCM management officials, who own a de minimis 

 

with this non-control determination, two of the Passivity Commitments were amended to 

reflect that (i) the final percentage of ownership and control of Ally stock held by 

Cerberus and the affiliated entities was less than 25 percent (i.e., Cerberus and the 

affiliated entities committed not to acquire any additional voting securities in addition to 

the 22.02 percent of Ally’s voting securities then owned or controlled by Cerberus), and 

(ii) Cerberus and its affiliated entities would not own or control any nonvoting equity 

interest in Ally. A copy of this letter and the amended Passivity Commitments is 

available on the Board’s website: 

https://www.federalreserve.gov/supervisionreg/legalinterpretations/20090324.pdf. On 

July 13, 2009, these Passivity Commitments were further amended to (i) remove a 

compliance date specified in one of the commitments, which had been rendered moot by 

its completion; and (ii) reference the non-control determination letter issued by the Board 

to Cerberus on March 24, 2009. The Director of the Division of Supervision and 

Regulation, acting under delegated authority, approved limited modifications to the 

Passivity Commitments in 2012, 2013, and 2015, to permit Cerberus to engage in certain 

limited transactions with Ally. On October 31, 2013, one of the Passivity Commitments 

was further amended to reflect that Cerberus and the affiliated entities committed not to 

own, control, or hold with power to vote any equity interest in Ally or any of its 

subsidiaries, other than the common shares of Ally that were then held by Cerberus and 

the affiliated entities, which at that time represented 8.7 percent or less of the common 

shares of Ally. 

3

 A “CCM-controlled portfolio company” refers to a portfolio company that CCM is 

considered to “control” under the BHC Act, although CCM would not necessarily be the 

majority shareholder.

4

 Cerberus advises that Mr. Kim Fennebresque, an independent director at a grocery 

store chain that is a Cerberus-controlled portfolio company and at two companies that 

were formerly Cerberus-controlled portfolio companies, owns less than 0.01 percent of 

Ally’s total common stock. Mr. Fennebresque also serves as an independent director on 

Ally’s board. To the extent that Mr. Fennebresque serves as an independent director at 

the grocery store chain and as an independent director at Ally, Cerberus represents that 

Mr. Fennebresque does not represent Cerberus in his position on Ally’s board and that 

Mr. Fennebresque was initially appointed to Ally’s board by the U.S. Treasury in 2009.
- 3 - 

amount of Ally stock (collectively, less than 0.001 percent of Ally’s total stock), and the 

ownership interest of Mr. Fennebresque, Cerberus represents that it has no knowledge of 

any other management official’s or employee’s ownership of Ally stock, and further

represents that it has no rights or agreements with respect to the ownership or distribution 

of the Ally shares held by the two management officials or Mr. Fennebresque. Cerberus 

further represents that it does not have either representation on the board of directors of 

Ally or any of its affiliates or the right to appoint a director to or have representation on 

the board of directors of Ally or any of its affiliates; any director or employee interlocks 

with Ally or any of its affiliates; any formal or informal agreements with Ally or any of 

its affiliates relating to the management or policies of Ally or Ally Bank; any existing or 

anticipated business relationships with Ally or its affiliates through which Cerberus might 

exercise control over Ally or its affiliates; or any relationships with other shareholders of 

Ally through which Cerberus might exert influence over Ally or any of its affiliates. 

Cerberus has also represented that Cerberus and the affiliated entities will not exercise or 

attempt to exercise a controlling influence over Ally if granted relief from the Passivity

Commitments. 

Based on all the facts of record, the Director of the Division of Supervision 

and Regulation, acting pursuant to authority delegated by the Board under section 

265.7(a)(2) of the Board’s Rules Regarding Delegation of Authority5 and after consulting 

with the General Counsel, has approved Cerberus’s and the affiliated entities’ request for 

relief from the Passivity Commitments. This action is based on the representations and 

commitments provided in your communications and correspondence related to your 

request, including the representations discussed above. Any change in the facts presented 

could result in a different conclusion and should be reported to Board staff immediately. 

This determination should not be construed as granting relief from any other conditions 

or commitments to which Cerberus and the affiliated entities may be subject. 

Very truly yours,

Ann E. Misback (signed)

Ann E. Misback 

Secretary of the Board

cc: Federal Reserve Bank of Chicago

 

5 12 CFR 265.7(a)(2).