GMAC, the automobile financing arm of GM has been recognized as a 'bank holding company' by the Feds. This provides unlimited (well, AMPLE) access to federal funds to bankroll consumer loans to purchase GM vehicles. Per the Wall Street Journal:
The Federal Reserve's decision to make GMAC LLC a bank-holding company throws the unit a desperately needed lifeline, but further entangles the federal government in areas of the economy it once considered beyond its purview.
In a Christmas Eve decision, the Fed allowed GMAC, a finance company controlled by private-equity fund Cerberus Capital Management and General Motors Co., to qualify as a bank. As a federally regulated bank-holding company, GMAC potentially gets access to billions of dollars of Treasury funds dedicated to recapitalizing banks.
Santa has been busy this Christmas!
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