The Fed approved the GMAC request to become a bank last week thus granting the company access to government lending programs. In doing so, its owners; GM with its 49 percent stake and Cerberus with its 51 percent stake, agreed to cut their shares in the company to no more than 10 percent and 14.9 percent respectively.
The move means more good news for GM. After receiving approval of its request for government aid the week before, GM dealers will now be able to provide more financing options to new car buyers, which will hopefully increase sales.
GMAC already has a banking arm that offers online savings accounts and certificates of deposit. Its move to become a bank holding company will allow the company to receive government support. This means it could receive guarantees of new debt that it issues, and request billions of dollars of capital under the $700 billion TARP fund.
Source: Automotive News