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CEO: Both House, Senate tax reform bills would benefit Ally

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CEO: Both House, Senate tax reform bills would benefit Ally

Ally Financial Inc. would benefit greatly from a final tax reform package that hews closely to either of the bills passed in Congress, CEO Jeffrey Brown said.

The House and Senate bills must advance through a reconciliation process before moving on to President Donald Trump's desk for signature. While the two packages differ in some areas, both would directly lower Ally's tax burden because the company has a normalized rate of roughly 35%, the current corporate tax rate, Brown said.

"For the most part, we are a full-freight taxpayer," he said at the Goldman Sachs Financial Services Conference. Both bills contemplate a new corporate rate of about 20%.

A key question that remains is the timing of a new tax regime, and whether it takes effect some time in 2018 or in 2019, Brown said. If it took effect Jan. 1, 2019, the company would see some impact to its deferred tax assets.

"Even if that happens, that will be way more than offset in 2019 and well into the future," Brown said. "This is a very bullish scenario regardless of whether it's the House plan or the Senate plan."

Ally has not yet decided what it would do with a tax break windfall, the CEO said. But several options are on the table, including reinvesting it in growth, paying a larger dividend and expanding share repurchases.