GMAC: Bank Holding Companies Do Go Bankrupt

...the Fed's 4-1 approval of the GMAC application to become a bank holding company ("BHC") is, to us, the latest evidence that our central bank badly needs a change in leadership. Providing the enablement for this ersatz BHC to access $6 billion in TARP funds will not change the firm's problematic financial picture, a picture colored heavily by exposure to the mortgage, consumer and auto sectors of a shrinking US economy.

...

While the Fed is allowed to give BHC applications accelerated processing, we'd like to see a more detailed explanation from the Board as to just how GMAC meets the statutory financial strength requirements for a BHC, even with the $6 billion in TARP funds. The Board's written order refers to business plans and other future actions, but the approval of the GMAC application seems to violate the safety and soundness requirements of 12 CFR. How can the members of the Board who voted for this application say that GMAC is able to serve as a source of financial and managerial strength to GMAC Bank?