News - National
Treasury, GMAC in talks for 3rd round of taxpayer aid
Posted: Oct 28, 2009 10:35 AM by Associated Press
The Treasury Department says "a viable GMAC is critical to the success of GM and Chrysler."
It says that's why it's in talks with the former lending arm of General Motors about a third helping of taxpayer aid.
GMAC provides wholesale financing to many GM and Chrysler dealerships to pay for the vehicles on their lots.
Earlier this year, the Treasury directed GMAC to raise an additional $11.5 billion in capital after the lender went through a government "stress test" along with 18 other big financial institutions.
While the nine other banks that were found to be undercapitalized have been able to raise funds from private investors, GMAC has been forced to go back to the government.
The government already owns a 35 percent state in GMAC after providing $12.5 billion in two previous rounds of aid. The Treasury is not commenting on the size of the bailout, but The Wall Street Journal reports it could be as much as $5.6 billion.
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