GMAC, the automobile financing subsidiary of embattled U.S. car maker General Motors, announced it will ease lending criteria after receiving $5 billion from the government yesterday.

For the past two months, GMAC has only approved auto loans for borrowers with FICO scores of 700 or above. But after receiving the much needed cash from the government, the lender says it will now consider lenders with average credit scores of 621 and higher, meaning more people will again be able to obtain financing for a new car.

Despite the fact the government has already forked over billions to our nation’s banks with the hope the banks would use the funds to make loans and stimulate the economy, GMAC is the first major lender to announce plans to ease their lending criteria.

Sheila Bair has served as the chairperson of the Federal Deposit Insurance Corporation (FDIC) since her appointment in June 2006, and has played an instrumental role in helping struggling banks survive—and worried consumers hang onto their money—during the 2008 economic crisis. Read more…