The government's financial rescue of GMAC "missed opportunities" to raise government accountability in the bailout process, the Congressional Oversight Panel (COP) found in its March report (download here). GMAC, once the credit arm of General Motors and now the 14th largest bank holding company in the US, could have been placed into bankruptcy and its costly subsidiary operations wound-down, the Panel said. COP noted that, by late 2008, GMAC’s residential mortgage segment added significant net losses to the company due to the downturn in the housing market: The government provided GMAC with $5bn of Troubled Asset Relief Program (TARP) funding on Dec. 29, 2008. It also granted further capital buffers of $7.5bn in May 2009 and $3.8bn in December 2009 after GMAC failed a stress test of capital strength. But the financial bailout of GMAC, originally intended to support the US automotive industry, now shows few signs of having contributed positively to saving the US auto industry, COP said. The Panel took care not to state a position on whether the Treasury Department should have rescued GMAC through the TARP funds. Instead, COP found the Treasury missed opportunities to increase government accountability and better protect taxpayers’ money. "Treasury did not, for example, condition access to TARP money on the same sweeping changes that it required from GM and Chrysler: it did not wipe out GMAC’s equity holders; nor did it require GMAC to create a viable plan for returning to profitability; nor did it require a detailed, public explanation of how the company would use taxpayer funds to increase consumer lending," COP said in an executive summary (download here) of the March report. The Panel said it is also "unconvinced" that GMAC bankruptcy was not a viable option in 2008. The Treasury might have set up a strategic bankruptcy plan for GMAC, for example, which could have supported automotive lending "while winding down its other, less significant operations, dealing with the ongoing liabilities of the mortgage lending operations, and putting the company on sounder economic footing." And what's more, of the $17.2bn the federal government paid to bail out GMAC, the Office of Management and Budget (OMB) estimates $6.3bn or more may never be repaid, COP said. The Panel reccomended the Treasury "clearly articulate" a plan to exit its support of GMAC. Write to Diana Golobay.