The Fed today made a special exemption and allowed GMAC to become a bank holding company, giving it access to TARP funds. Just last week, GMACs application to convert was denied by the FDIC n the grounds that it did not have enough capital. GMAC tried to sell bonds backed by auto loans but investors wouldn't bite, worried about the quality of the underlying loans and a surge in defaults by car buyers.
That means that GMAC bank customers do not have to worry about the hassle of the parent company defaulting. While the parent company was not a bank holding company, GMAC bank was and still is a bank and deposits were fully covered by FDIC insurance. The change in status of the parent company means extra stability for the bank and its depositors.
GMAC Bank has been extremely competitive with rates lately. It currently has the top 6 month, 1 year, 18 month, 2 year, and 3 year Certificates of Deposit rates. It will remain to be seen if the change in its parent company and the injection of TARP funds will lead it to lower its consumer deposit rates.
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