If GMAC is to become a captive finance company again, it won't be the government doing it.
A congressional panel recommended that the U.S. Treasury Department consider merging GMAC Inc. back into General Motors Co., an idea pushed by some investment analysts. But Treasury declined to get involved.
Treasury said in a statement this month that it will play no role in deciding on the relationship between the troubled bank and the automaker and will leave that choice up to the companies and their boards.
"We would not initiate or take a position other than one supported by our board designees," it said.
The Congressional Oversight Panel, a committee formed by Congress to oversee Treasury's spending of Troubled Asset Relief Program funds, recommended that the federal agency consider promoting a merger.
The panel is "concerned that Treasury has not given due consideration to the possibility of merging GMAC back into GM, a step which would restore GM's financing operations to the model generally shared by other automotive manufacturers, thus strengthening GM and eliminating other money-losing operations," the panel's March 10 report said.
Treasury's rejection seems to shut the door for now on any further exploration of the idea.
Peter Jackson, a spokesman for the Congressional Oversight Panel, said he is not aware of any congressional initiatives to advance such a merger.
Since December 2008, the government has spent $17.2 billion to rescue GMAC as part of its bailout of the automobile industry. It now owns 56.3 percent of the bank holding company, the 14th-largest in the United States.
"We think this model works, that a bank holding company is most beneficial to our customers," said GMAC spokeswoman Gina Proia.
GM spun off General Motors Acceptance Corp. into an independent company in 2006. GMAC says it provides 91 percent of the floorplan financing for GM dealers' inventory and 77 percent for Chrysler Group dealers' inventory.