GMAC: Government to get into car loan business

The government figures that if car loans are scarce, car buyers will stay on the sidelines. To remedy this it will inject $7 billion into GMAC Financial Services, which finances GM (GM) and Chrysler auto loans. Based on the company's needs it could get an additional $7 billion.

Whether the government is right in its assessment of the car loan industry is hard to tell. Scores of banks also provide lending for the industry. No one knows for certain whether these banks would take up the slack if GMAC disappeared.