TARP panel questions GMAC bailout

Bill Radke Mar 11, 2010
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TARP panel questions GMAC bailout

Bill Radke Mar 11, 2010
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TEXT OF INTERVIEW

Bill Radke: A congressional panel that oversees the federal bailouts
is questioning the Bush administration’s decision to rescue the giant consumer lender, GMAC. That report was just released this morning. The panel’s chair is Harvard Law Professor Elizabeth Warren. Good morning.

Elizabeth Warren: Good morning.

Radke: Your panel is saying the government might have been able to arrange bankruptcy for GMAC and the taxpayers wouldn’t be on the hook for a $17 billion bailout, about $6 billion of which we may never see back.

Warren: Well, that’s part of the problem. The company they have now created is one that seems to have no business plan. The CEO of GMAC has described this business as having very profitable auto operations, which was the reason Treasury said they wanted to rescue it. But now, the whole mortgage-lending portion of GMAC is the millstone around the company’s neck.

Radke: Well since that bailout is already done, what do you want to happen based on this morning’s critique?

Warren: Well, what this morning’s critique is about is about the plan going forward. You know, it would be possible still to take the auto finance arm of GMAC and put it back within GM, which would cause GM then to operate like the other major auto companies, with its own captive auto finance. The hard question is why that should be separated off and supported with taxpayer-protected deposit money.

Radke: Harvard Law Professor Elizabeth Warren chairs the congressional oversight panel that oversees the federal TARP program. Thank you, professor.

Warren: Thank you.

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