GMAC May Never Repay Part of Government Aid

Gmac-logo
At least $6.3 billion of the $17.2 billion in taxpayer support to GMAC will likely never be repaid, according to the congressional panel overseeing federal bailout money. The panel criticized the Treasury Department for not attaching more conditions to the money as it did with Chrysler and GM.

Treasury wiped out the shareholders of those automakers and demanded detailed plans for how the companies would return to profitability; that was not the case for GMAC. Treasury also did not require an increase in consumer lending.

Chairwoman Elizabeth Warren of Harvard Law School said the Treasury Department should have taken GMAC into Chapter 11 bankruptcy to increase accountability and protect taxpayer investment.

GMAC and Treasury both insist the company is solvent and that GMAC will continue to lend money to auto dealers and consumers while paying back taxpayer dollars.

GMAC lost $8 billion in 2009 when its mortgage lending subsidiary ResCap imploded after pursuing a high degree of subprime mortgages and selling them in bundled securities.

Panel: Some Aid to GMAC Will Never Be Repaid (Detroit Free Press)

By Stephen Markley | March 11, 2010 | Comments (0)
Tags: In The News

Comments 

Post a Comment 

Please remember a few rules before posting comments:

  • If you don't want people to see your email address, simply type in the URL of your favorite website or leave the field empty.
  • Do not mention specific car dealers by name. Feel free to mention your city, state and brand.
  • Try to be civil to your fellow blog readers. This blog is not a fan or enthusiast forum, it is meant to help people during the car-buying process and during the time between purchases, so shoppers can keep a pulse on the market.
  • Stay on topic. We want to hear your opinions and thoughts, but please only comment about the specified topic in the blog post.
view posting rules

If you have a TypeKey or TypePad account, please Sign In

Search Results

KickingTires Search Results for

Search Kicking Tires

KickingTires iPhone App
Ask.cars.com