GMAC, the automobile financing company spun off from General Motors, finally received USD 6 billion from the US Government via the TARP fund. GMAC was able to access the TARP fund by magically turning into a bank holding company (BHC). With this new cash infusion I’m sure the management of GMAC will do everything possible to spend it wisely and not have a repeat of the subprime lending practices in the housing market.
GMAC said in a statement that it would modify its credit criteria to include financing for customers with a credit score of 621 or above, a significant expansion of credit compared with the 700 minimum score put in place two months ago.
DOH…of course this is different from subprime lending! I wonder if people will really be taking out car loans if they know their job is in jeopardy or if the financial crisis gets worse. Since all US taxpayers are on the hook for the USD 6 billion, sucks to see the same thing happening over and over.