(snip)"DETROIT (AP) -- If your credit isn't good, General Motors Co. still wants to sell you a car.

The problem is, it can't. At least not in big numbers. That's why the automaker wants more control over its lending again.

GM's top North American executive Mark Reuss, under pressure to quickly sell more cars and boost GM's value as it gets ready to sell stock to the public, said a shortage of subprime lending is holding back sales in the U.S.

But the automaker's main lender, Ally Financial Inc., has little appetite for risky loans, having spent the last few years cleaning up its own financial mess caused mainly by its failing mortgage lending business. Both companies are majority-owned by the U.S. government.

For decades, GM owned Ally, writing its own loans through the so-called captive finance arm. Nearly every automaker makes loans in such a fashion. But a cash-starved GM sold most of Ally -- formerly known as GMAC -- in 2006.

GM and Ally now have a loose partnership that gives Ally control over who gets a car loan. If GM returned to auto lending -- either through buying Ally's auto business or starting its own in-house lending unit -- it could set lending standards itself. That could benefit the automaker by allowing it to extend loans to people with weaker credit and to more lease customers.

"There's a real sense of urgency on GM's part to maximize its sales" as it gets closer to the stock offering, said Kirk Ludtke, senior vice president of CRT Capital Group in Stamford, Conn.

Subprime buyers make up a significant portion of the car buying market. About 16 percent of all new-vehicle loans written in the fourth quarter of 2009 were to customers with below prime credit, according to credit agency Experian. That means they went to customers with credit scores below 620 on a 300-to-850-point scale."(snip)

(snip)"Ally has been less than eager to resume lending to risky customers. After GM sold a majority stake in Ally, the lender became heavily involved in the subprime mortgage boom, a move that nearly bankrupted the company when the housing market collapsed. Ultimately, the federal government has spent $16.3 billion to bail out the lender, leaving taxpayers with a 56 percent stake in the former GMAC.

Ally has spent the last year trying to clean up its mess, diversifying its customer base beyond just GM buyers, launching a highly profitable online banking service and working to sell what remains of its mortgage lending business. Earlier in May, the company posted its first quarterly profit in more than a year and rebranded itself as Ally."(snip)

(snip)"An additional complication comes from Chrysler Group LLC, which also depends on Ally for loans. CEO Sergio Marchionne told reporters Thursday that Chrysler could be at a disadvantage if GM buys back part of Ally. "If they control the lending practices and the degree of penetration and support that they gave to Chrysler, that would make us very, very concerned," he said.

In the end, any decision is likely to be influenced by the Treasury Department, which designated Ally the preferred lender for Chrysler as well as GM -- and owns big stakes in all three after bailing them out last year.

Ally, for its part, issued a statement last week saying the company is committed to staying in the auto lending business. Ally spokeswoman Gina Proia declined to comment on whether the lender has faced pressure from GM to make more subprime loans or leases. However, she said that as the economy has improved, Ally has been opening its pockets to more customers.

For example, 12 percent of all auto loans that Ally wrote in the first quarter were leases, up from 4 percent in the fourth quarter and virtually zero last year, she said."(snip)

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It would appear that all of the necessary elements in place for the US gov't to allow Ally Bank ( former GMAC ) to become the automotive equivalent of Fannie / Freddie !!