Auto lender GMAC spent $410,000 lobbying federal government in first quarter

WASHINGTON — Big auto and mortgage lender GMAC LLC, which has received $12.5 billion in federal bailout aid, spent $410,000 lobbying in the first quarter on legislation putting restrictions on companies receiving the rescue money, its restructuring as a bank holding company and other issues, according to a recent disclosure report.

GMAC also lobbied Congress on a measure that would have allowed judges to ease terms of mortgage loans for homeowners in bankruptcy proceedings, which was a high priority for consumer groups. The bill was defeated in the Senate in late April.

Legislation to slap punitive taxes on bonuses paid to employees of companies receiving federal aid under the $700 billion bailout program quickly passed the House in March but stalled in the Senate.

Detroit-based GMAC also lobbied in the January-March period on legislation to create a federal commission to regulate the safety of financial products, and on measures related to insurance regulation and financial literacy.

The $410,000 was the same amount GMAC spent in the first quarter of 2008, but well below the $1.5 million spent in last year's fourth quarter.

Besides Congress, GMAC lobbied the Federal Deposit Insurance Corp. and the Federal Reserve in the first quarter, according to the disclosure report filed April 20 with the House clerk's office.

GMAC late last year became a bank holding company, enabling it to receive a $5 billion bailout loan from the federal government. In May, the Treasury Department extended an additional $7.5 billion in federal aid to GMAC to keep loans flowing to prospective buyers of General Motors Corp. and Chrysler LLC vehicles and to shore up its capital position.

After the government's "stress test" for the country's biggest banks in early May, GMAC was ordered to raise $11.5 billion in additional capital. But the company, which reported a first-quarter loss of $675 million, has seen rising defaults in its auto finance division. That, combined with soured assets in its Residential Capital LLC mortgage unit, made it difficult for GMAC to raise capital from private investors.

To help GMAC raise additional funds, the FDIC recently took the rare step of allowing the junk-rated company to gain access to its debt guarantee program. GMAC will be allowed to issue as much as $7.4 billion in debt, guaranteed by the FDIC in case the company defaults on payment. In addition, the Fed waived rules to give GMAC's new bank, called Ally Bank, more leeway to make loans to GM customers.