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GMAC Financial Services

, the lender partly owned by

General Motors

(GM) - Get Free Report

, has asked the

Federal Reserve

for clearance to become a bank holding company, which would make it eligible for funds under the government's Troubled Asset Relief Program.

Additionally, GMAC asked the Treasury Department to allow it to participate in the Capital Purchase Program created under the Emergency Economic Stabilization Act of 2008, provided it is declared a bank holding company.

As a bank, GMAC said it would "obtain increased flexibility and stability to fulfill its core mission of providing automotive and mortgage financing to consumers and businesses." GMAC, which is majority owned by private equity firm Cerberus, said the change would shore up its capital position.

Cerberus also owns most of GM competitor


, another of Detroit's Big Three along with


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Meanwhile, GMAC set plans to launch cash tender offers to buy or swap some of the debt held by its units and mortgage business Residential Capital for cash, new notes or preferred stock. The proposal is meant to boost GMAC's capital levels and reduce its debt.

Executives from the


have been in Washington this week telling legislators that they would like help from the government to strengthen their weakening financial positions.

If GMAC's application to become a bank holding company is accepted, GMAC Bank will become a Utah-chartered Fed member bank.

This article was written by a staff member of