June 1 (Bloomberg) -- GMAC LLC, the auto and home lender that got $13.5 billion in U.S. funds, said the American Bankers Association was “highly inappropriate” in faulting its Ally Bank for paying high rates to lure depositors.

“Ally Bank has capital well in excess of Federal Deposit Insurance Corp. requirements and is better capitalized than many of your members,” Alvaro de Molina, the chief executive officer of GMAC, said in a letter today to Edward Yingling, president and CEO of the bankers’ Washington-based trade group.

GMAC, which received $7.5 billion from the government to expand auto lending at Chrysler LLC and bolster its capital base, has been deemed critical to the survival of General Motors Corp. and Chrysler, two of the country’s three biggest car manufacturers. Yingling wrote FDIC Chairman Sheila Bair on May 27 noting GMAC’s U.S. support and criticizing Ally Bank’s interest rates on savings accounts.

“It is completely inappropriate, and indeed risky, for GMAC/Ally Bank to be allowed by the regulators to continue to pay rates well above the market,” Yingling wrote. GMAC’s deposits climbed to $22.5 billion from $1.2 billion in the past four years, mostly through sales over the Internet. Ally does not operate any bank branches.

The FDIC on May 29 barred weaker banks from paying interest rates out of line with local markets to keep lenders from taking on excessive risk. The 3 percent of banks deemed less than “well-capitalized” by the FDIC will be prohibited from matching offers made by a small number of high-rate competitors, the FDIC said.

Ally CDs

Ally Bank advertised 6-month CDs at 2.13 percent as of May 18, compared with a national average of 0.99 percent, while the lender’s 1-year and 2-year CDs offer among the highest rates in the nation, Yingling said in his letter.

“This aggressive deposit strategy is particularly egregious when it is used by a troubled bank in which the government holds a controlling interest,” Yingling said. The U.S. Treasury owns 35 percent of GMAC, while Cerberus Capital Management LP holds 22 percent and General Motors has 9.9 percent, GMAC said on May 29.

Yingling’s comments regarding FDIC rules are “irrelevant” because of Ally’s capital status, de Molina said. Well- capitalized banks, those that have adequate equity to withstand losses, must have a ratio of Tier 1 assets to total assets of at least 6 percent. GMAC’s Tier 1 ratio was 10.35 percent as of March 31, spokeswoman Gina Proia said.

TARP Capital

“Ally is deploying TARP money as immediately and directly to support American small businesses and consumers in these difficult times, as other banks should be doing,” de Molina said, referring to Treasury’s Troubled Asset Relief Program. “These loans will be funded, in part, by deposits which offer an attractive return for consumers that have money to invest.”

GMAC introduced the Ally Bank brand on May 15 and is relying on retail deposits because the lender’s junk-rated debt makes it too expensive to sell bonds. De Molina, a former head of investment banking at Bank of America Corp., has hired former Bank of America colleagues for senior finance, marketing and risk posts in the past year.

The Federal Reserve in December approved GMAC’s application to become a bank holding company.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net

Last Updated: June 1, 2009 12:30 EDT