WASHINGTON, D.C. — As GMAC's chief executive officer and chief financial officer get ready to testify before a Congressional Oversight Panel today, the executives said in prepared remarks that if GMAC had not received access to government funds that many GM and Chrysler dealers would not have survived due to lack of wholesale lines and retail financing for customers.

Robert Hull, GMAC CFO indicates, "The government assistance provided to GMAC was a critical part of stabilizing the company and the U.S. auto industry, and we are clearly grateful for that assistance during the financial crisis.

"Our decision to pursue federal assistance in December 2008 was driven by the need to preserve funding for U.S. auto dealers and financing for consumers during what was an unprecedented capital and credit markets' disruption," he says.

Michael Carpenter, CEO, adds, "The capital infusion from the U.S. Treasury has been critical in allowing GMAC to fulfill its mission of supporting the U.S. auto industry's revitalization. GMAC has a unique position in the auto industry as one of the largest providers of credit to dealers and end consumers and we are able to hold that position in large part because of the infrastructure, the history in this business and the experience of our talent base."

Carpenter also says, "Given the unavailability of liquidity from other sources during the financial crisis, it is fair to say that without the government's support of GMAC, numerous GM and Chrysler dealers would not have survived and thousands of consumers would not have been able to buy GM or Chrysler vehicles."

Outlining what the government funds have helped GMAC to do, Hull lists:

—"It removed additional risk to General Motors and the auto industry by securing GMAC's ability to fund auto dealers for approximately $20 to $30 billion of wholesale loans.

—It supported the needs of consumers by restoring GMAC's ability to finance their purchase and lease of vehicles. Today, we service approximately $60 billion in consumer automotive accounts in the U.S. for over 4 million customers.

—It allowed our subsidiary, Residential Capital LLC (ResCap) to continue servicing approximately 3 million residential mortgage loans and assisted approximately 500,000 borrowers avoid risk and imminent default or foreclosure. Today, ResCap is the fifth largest servicer of mortgage loans in the U.S."

He went on to say that auto finance companies, such as GMAC, are vital to automakers' ability to sell vehicles.

"Automotive sales are highly dependent on the availability of dealer inventory and financing to consumers. Without credit for consumers and auto dealers, auto manufacturers would not have a reliable dealer distribution network for their vehicles, and the dealer distribution network would not have an effective means of selling those vehicles to consumers," Hull explains.

In the fourth quarter of 2008, he said that because of the hurting credit markets and his company's need to preserve capital, GMAC had to restrict consumer auto financing activities. Leasing activities were immediately halted and retail financing was trimmed back to cover only those consumers with the highest credit scores.

"In late December 2008, immediately after GMAC received regulatory approval to restructure as a bank holding company and following the receipt of the initial TARP investment, we announced that GMAC was able to lift the previous restrictions and offer retail financing for consumers with a credit bureau score of 621 or above, reflecting a much broader spectrum of consumers," Hall notes.

"As a result, we returned to more normal levels of consumer financing volume, managed portfolio risk during the challenging economic climate and helped stabilize the U.S. auto industry," he continues.

In the fourth quarter of 2009, he indicated that GMAC's U.S. retail penetration for GM was about 30.3 percent, up dramatically from 4.7 percent in the fourth quarter of 2008.

As for Chrysler, its penetration was 25.5 percent in the fourth quarter of last year.

"All combined, this translates into over $5.9 billion of new retail auto financing for U.S. consumers in the fourth quarter of 2009, compared to only $836 million in the fourth quarter of 2008. In total for 2009, GMAC provided over $18 billion in new auto financing to U.S. consumers," Hull says.

Continuing on, Hull notes that the financing for dealers via wholesale lines is integral to supporting the sale of vehicles.

"Given the uncertainty and financial instability of GM and Chrysler over the past year, as well as an overall contraction in lending, vehicle inventory financing through traditional banks has not been readily available to GM and Chrysler auto dealers, in particular," Hull says. "GMAC has served in the unique role and worked with both GM and Chrysler to support their respective dealer networks while still maintaining prudent lending practices."

He went on to indicate, "Because of GMAC's unique position in the auto industry, we were able to prevent disruption during the restructuring and immediately provide interim financing for Chrysler dealers that applied for credit. The company was able to accomplish this as a result of our expertise in the business, our infrastructure and minimizing immediate risk through a loss-mitigating arrangement with the government.

"Subsequently, we expeditiously worked to conduct our formal underwriting process to determine whether those credit relationships could be continued on a longer-term basis, and the vast majority are continuing today," he adds.

Ultimately, he says, "Without the assistance, we would have been forced to significantly cut or eliminate lending to auto dealers, which would have had a material downstream impact on thousands of dealerships, GM, Chrysler, their suppliers, others that support the automotive industry and the overall U.S. economy."

As of Dec. 31, Hull said GMAC's U.S. wholesale penetration for GM dealer stock stood at 90.9 percent, compared to 85.2 percent at the end of 2008.

Also, he says, "As of Dec. 31, 2009, GMAC completed the formal underwriting process for 1,474 U.S. Chrysler dealers previously funded through Chrysler Financial and approved 94 percent of those dealers. As a result, GMAC's U.S. wholesale penetration for Chrysler increased to 77.3 percent on Dec. 31, 2009, up from 67.3 percent on Sept. 30, 2009. GMAC provided approximately $4 billion of floor plan outstandings for Chrysler dealerships."

Finally, Hull says, "In summary, we recognize our unique ability to help bolster the American auto industry while also managing the taxpayer risk appropriately. We have weathered the worst of the storm and are aggressively taking the actions needed to serve our customers. We are honored to be the preferred automotive finance provider for GM and Chrysler and look forward to further leveraging our expertise in the automotive finance industry."

Carpenter, meanwhile, points out, "Automotive financing is our core business and we have the infrastructure, talent and experience to expand this area of the business."

From 2005-2007, GMAC's North American auto finance business earned about $1 billion each year on a pre-tax basis and $3 billion of net revenue. He says this unit of the company has been "consistently profitable" in 2009 after it lost money for the first time in 90 years in 2008.

Offering some company objectives, Carpenter indicates that the fourth will be to fully transition to a bank holding company and he says GMAC is "well underway in this process."

"The steps outlined above will, I believe, position GMAC to be the premier auto financial services firm with secure and diversified funding sources and a high level of profitability. GMAC will continue to be the major source of funding for the 6,000 GM and Chrysler dealers that represent the vast majority of these manufacturers' sales and also finance in the range of 30 to 40 percent of total end consumer sales," he says.

"The support received from the U.S. government has been critical in allowing GMAC to play an important role in the rebuilding of the U.S. auto industry and positions the company for future success," he continues.

He notes that GMAC made about $1 billion in dividend payments on the taxpayer's investment to date and plans to repay the investment in full over the next several years.

"Our financial plan anticipates that as the company's financial performance improves during 2010 and beyond, debt capital will be increasingly available at more competitive rates. More importantly, we and our financial investors believe that an initial public offering could be possible sometime in the next two years," Carpenter says.

"This would allows us to return to being an investment grade credit, reducing our capital requirements and begin the process of paying back the U.S. taxpayer in full," according to Carpenter.