Top regulator grants bank holding company status to GM's troubled financing arm. Cites turmoil in financial markets.
NEW YORK (CNNMoney.com) -- The Federal Reserve on Wednesday opened the door for GMAC to get federal bailout money by granting the troubled General Motors finance arm status as a bank holding company.
"In light of the unusual and exigent circumstances affecting the financial markets, and all other facts and circumstances, the board has determined that emergency conditions exist that justify expeditious action," the Fed said in an order released Wednesday evening.
The move represents the latest extraordinary government action intended to rescue the American auto industry. Last week, President Bush announced a $13.4 billion aid package for GM (GM, Fortune 500) and Chrysler LLC, saying that allowing the U.S. auto industry to collapse "is not a responsible course of action."
GMAC is the biggest lender to GM's 6,500 dealers nationwide, most of which get the financing they need to operate and buy vehicle inventory from the automaker.
