GMAC Cleared to Become Bank

WASHINGTON (AP) -- The Federal Reserve has granted a request by the financing arm of General Motors (GM Quote) to tap the government's $700 billion rescue fund, bolstering GM's ability to survive.

The Fed announced Wednesday that it had approved GMAC Financial Services' request to become a bank holding company. That designation makes GMAC eligible to receive a portion of the bailout fund and get emergency loans directly from the Fed.

Analysts had speculated that without financial help, GMAC would have had to file for bankruptcy protection or shut down, dealing a serious blow to GM's own chances for survival. The Fed cited "emergency conditions" in justifying its decision. ...