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US Taking Majority Stake in GMAC

   VOA News 30 December 2009
   In  this  30  April  2009  file  photo,  a  GMAC  sign  is  shown at a
   GM/Chrysler dealership in Oakland, Calif.

Photo: AP

   In  this  30  April  2009  file  photo,  a  GMAC  sign  is  shown at a
   GM/Chrysler dealership in Oakland, Calif.

   The  U.S.  government  is taking a controlling stake in GMAC Financial
   Services  by providing $3.8 billion in fresh aid to the company, which
   is the former financing arm of U.S. auto maker General Motors.
   The Treasury Department Wednesday said the new aid, which comes from a
   taxpayer-financed  bailout  fund,  is less than the roughly $6 billion
   the  government  had  earlier thought GMAC would need to stabilize the
   company.
   GMAC  had  already  received  $12.5 billion in emergency financial aid
   from   Washington  after  auto  sales  plunged  due  to  the  economic
   downturn.   Its  balance  sheets were also severely affected by losses
   from its sub-prime mortgage lending practices.
   The  Treasury Department received a 35 percent equity stake in GMAC in
   exchange  for  the  loans.  Officials say that with the new agreement,
   the government's ownership in GMAC will climb to 56 percent.
   The  lender  was among 19 banks to undergo so-called "stress tests" to
   determine  whether  they needed more capital to withstand the slumping
   U.S. economy.
   GMAC  was used by GM to help customers get the financing needed to buy
   its cars.
   Some information for this report was provided by AFP and AP.

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