FDIC Okays Change of Control on GM ILC

The Federal Deposit Insurance Corp. has loosened its moratorium on industrial loan company applications, allowing General Motors to move ahead with the sale of its financial services unit to private investors.The FDIC approved a change-in-control notice involving GMAC Automotive Bank, an industrial loan company based in Midvale, Utah. The depository is part of General Motors Acceptance Corp., a 51% stake of which is being sold to Cerberus Capital Management and other investors for $14 billion. "The FDIC board decided to act on this notice during the moratorium on ILC applications to avoid potential interference with a major restructuring by General Motors Corp.," FDIC Chairman Sheila Bair said. The sale is expected to close by year-end. On July 28, the FDIC placed a six-month moratorium on the approval of Wal-Mart's ILC application along with all other applications for FDIC-insured industrial loan companies. The FDIC is currently under pressure to extend the moratorium.