US Takes Majority Stake in GMAC

The government gave GMAC Financial Services another $3.8 billion in cash and took a majority stake in the auto lender, aiming to stabilize the company as it struggles with big losses in its home mortgage unit. The fresh infusion is on top of $12.5 billion in taxpayer money Detroit-based GMAC has already received from the government.

The new aid will boost the federal government's ownership in GMAC to 56% from 35%, and means the US now holds a majority stake in three companies that it bailed out with taxpayer funds—GMAC, General Motors, and AIG. Keeping GMAC alive has been a critical component of the Obama administration's effort to rescue GM and Chrysler. The lender provides critical wholesale financing to thousands of GM and Chrysler auto dealers, allowing them to stock their showroom floors with vehicles. (More GMAC stories.)