(AP) The U.S. government was moving ahead Wednesday on a fresh multibillion dollar cash infusion to stabilize auto financing company GMAC Financial Services, according to a person with knowledge of the matter.
GMAC, based in Detroit, is instrumental to the operations of automakers General Motors Co. and Chrysler Group LLC. It has already received $12.5 billion in taxpayer money and is 35 percent owned by the federal government.
The person, who spoke on condition of anonymity because discussions weren't complete, says the new infusion would be in the range of another $3 billion. That would fall short of the roughly $6 billion the government had earlier thought GMAC would need to stabilize the company.
An announcement of the injection could come late Wednesday or on Thursday, the person says.
After the government conducted "stress tests" on financial institutions earlier this year, it demanded that that GMAC raise an $11.5 billion capital cushion to help it weather further economic decline. GMAC was unable to raise the funds privately.
The anticipated additional government aid for GMAC would come from the $700 billion taxpayer-financed bailout pot the government set up at the height of the financial crisis last year. The money was intended to shore up banks so that they would boost lending to people and businesses and support the sagging economy. However, money also has been used to help GM, Chrysler, insurance companies and others survive the worst financial crisis and recession since the 1930s.
GMAC has been in negotiations with Treasury officials for months over additional taxpayer aid. - CBS News Story
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