GMAC, the troubled
automobile lender, may receive a $7.5 billion infusion from the U.S.
government as early as next week, the Washington Post reported in its
Saturday edition, citing unnamed sources.
funds for GMAC would come as part of an Obama administration package
that aims to revive the nation's financial system even after it found
that major banks need less financial aid than expected, the Post said.
Treasury Secretary Timothy Geithner told Reuters Television on Friday
that the administration will provide substantial support to GMAC, a
vital provider of financing for buyers of U.S.-made cars.
likely, again, that GMAC will need to take additional capital from the
government and we'll be prepared to provide that, Geithner said in the
The Treasury and U.S. banking regulators say GMAC
needs to raise $11.5 billion to fill a capital hole it could face if
the economy were to deteriorate further.
GMAC, the former
financing arm of General Motors Corp., has taken $5 billion from the
government already. In addition, the Treasury has lent GM $884 million
to support GMAC's lending activities.
Under the restructuring of
Chrysler Corp., GMAC is assuming the business of Chrysler Financial.
When the Obama administration announced Chrysler's bankruptcy filing on
April 30, it said it would offer support to GMAC, including necessary
capital, to allow it to finance Chrysler's sales.