It's all the rage to turn your corporate entity into a bank in order to get access to the TARP financial bail out money.

Fed Approves GMAC Request to Become a Bank:

In a 4 to 1 vote, the Federal Reserve Board approved GMAC’s application to transform itself into a bank holding company “in light of the unusual and exigent circumstances” affecting the financial markets. The move will allow GMAC to tap as much as $6 billion in government bailout money. The approval came as GMAC bondholders were facing a Friday deadline to vote to approve a complex transaction that would significantly reduce the company’s outstanding debt.

As of Dec. 17, bondholders had agreed to convert less than 60 percent of their debt into preferred shares. Some big bondholders like the investment firm Pimco have said they do not intend to exchange bonds unless Cerberus Capital Management — the private equity firm that owns 51 percent of GMAC — puts more money into the company.

GMAC has been hit with huge losses in both its mortgage and auto loan businesses. The approval from federal regulators may help persuade remaining bondholders and should make it easier for the company to raise money. It should also help General Motors, which owns a minority stake in GMAC and depends on the firm to finance some of its cars

Now here's the rub. You think this is a GM company? No, GM sold it off a while ago and now holds a minority stake.

And as a condition of turning GMAC into a bank the Federal Reserve has demanded GM reduce it's stake in GMAC from 49% to less than 10%.

Interesting demand isn't it?