By Rick Rothacker
Dec 19 Ally Financial Inc, the U.S. auto lender 74-percent owned by the U.S. government, on Wednesday said it repaid its remaining debt issued under a financial-crisis-era program, the latest step in its effort to reimburse taxpayers.
The former auto lending arm of General Motors Co said it paid back $4.5 billion in debt guaranteed by the Federal Deposit Insurance Corp's Temporary Liquidity Guarantee Program (TLGP). It repaid another $2.9 billion in debt issued under the program in October.
Other financial institutions such as Bank of America Corp have also been repaying debt issued under the program, which aimed to bolster confidence in the banking system.
Ally Chief Executive Michael Carpenter is working to repay a series of bailouts spurred by losses in the lender's Residential Capital mortgage unit during the financial crisis that erupted more than four years ago.
This year, ResCap filed for bankruptcy, and Ally reached agreements to sell international operations in a bid to speed up repayment to taxpayers. The company is turning its focus to U.S. auto lending and Internet banking.
Of the $17 billion Ally received under the U.S. government's Troubled Asset Relief Program, it has paid back $5.8 billion, including dividends. On Wednesday, the U.S. Treasury announced plans to sell its remaining shares in automaker GM, leaving Ally as the last major company that still owes the government under TARP.
"Repayment of the remaining debt issued under the TLGP marks an important milestone for Ally as we continue our plans to exit the government support programs utilized during the financial crisis," Jeffrey Brown, Ally's senior executive vice president of finance and corporate planning, said in a statement.
Last week, the Treasury completed its final sale of common stock in insurer American International Group, ending another major bailout.