This is actually a no brainer: General Motors is on both sides of GMAC, lending money and providing the products purchased with the money. Of course they are going to use TARP money to lend. Still, it’s nice to know that at least some TARP money will be used as advertised.
From the Financial Times:
GMAC, the financial services group part-owned by General Motors, on Tuesday said it would immediately loosen its criteria for vehicle loans in the wake of a two-step government bail-out.
“The actions of the federal government to support GMAC are having an immediate and meaningful effect on our ability to provide credit to automotive customers”, GMAC’s president Bill Muir said in a statement.
GMAC said that it would now provide retail financing for car buyers with a score of 621 or more on the Fico scale, a widely-used measure of Americans’ creditworthiness.
Two months ago, it tightened the criteria to include only buyers with a score of 700 or above, out of a maximum of 850.
GM also sought to capitalise on the GMAC rescue by announcing on Tuesday new low-interest and interest-free offers on many of its vehicles, financed by GMAC. Mark LaNeve, the carmaker’s North American marketing chief, described the incentives as a move “to encourage our customers to get back into the game”.