Untrustworthy Ally | Washington Free Beacon

Untrustworthy Ally | Washington Free Beacon

Ally is now the worst performing bailout recipient, and many in the financial industry do not see a path to recovering taxpayer money.
Prior to May 2009, Ally was known as General Motors Acceptance Corporation (GMAC). It served as GM’s in-house auto-loan shop and provided financing to approximately 75 percent of the inventory at GM dealers.
In 2006, in order to generate capital, a struggling GM sold a 51-percent stake in a then-vibrant GMAC—which had entered the booming subprime mortgage business earlier in the decade—to Cerberus Capital Management for $14 billion.
“GMAC was taken out of GM in the first place because everyone thought it was so valuable,” Whalen said. “Investors wanted to salvage it from a GM bankruptcy and GM needed the cash at the time.” The sale also preserved GMAC’s credit rating, which allowed them to make even more subprime loans to house and auto buyers.
As the economic collapse took hold, GMAC/Ally looked to the government to stay afloat. Ally has spent nearly $9 million on lobbying since 2007.
Despite lacking the capital to qualify as a bank, the Federal Reserve granted Ally an exception and re-designated it a “bank holding company” in December 2008, a move that allowed it to receive bailout money. Within a week, the Fed bought a $5 billion stake in Ally and loaned the company another $1 billion.
After two more rounds of bailouts under the Obama administration, Ally received another $11.3 billion in 2009.

More corruption excellence for Obama/Soetoro "the Great!"