Breaking from the Washington Post:
The federal government said Wednesday it will take a majority ownership stake in the troubled auto lender GMAC, providing another $3.8 billion in aid to the company, which has been unable to raise from private investors the money it needs to staunch its losses.
The new aid package for GMAC, coming as most large banks are repaying the government, underscores both the problems afflicting the company and its importance to the Obama administration’s efforts to revive the auto industry.
GMAC, which already has taken $12.5 billion in direct federal aid along with other forms of government support, is the largest lender to General Motors and Chrysler dealerships and to their auto-buying customers.
The Treasury Department said it will increase its stake in GMAC to 56 percent from 35 percent. It also will hold about $14 billion in what amount to loans that GMAC may eventually be required to repay. The government plans to appoint four of the company’s nine directors.
GMAC becomes the sixth company taken over by the federal government in the last two years, joining mortgage financiers Fannie Mae and Freddie Mac, automakers General Motors and Chrysler, and the insurance company American International Group. The government also owns a large stake in Citigroup.