GMAC Financial Services announced the day before Christmas that its application to become a bank holding company had been approved by the Federal Reserve. GMAC Bank also said it had received approval from the Utah Department of Financial Institutions to convert to a state bank. “As a bank holding company, GMAC will have expanded opportunities for funding and access to capital, which will provide increased flexibility and stability,” the company said in a press release. “Today’s announcement marks a key turning point in GMAC’s history,” said GMAC CEO Alvaro de Molina. “As a bank holding company, GMAC will be competitively positioned for the long-term to provide financing to auto and mortgage consumers and businesses such as automotive dealers.” GMAC’s previously announced separate private debt exchange offers and cash tender offers were subject to the approval of the bank holding company application. The offers expired Friday at 11:59 p.m. EST, and GMAC has made no announcement whether the final stipulation of the approval had been completed. General Motors Corp. (GM) shares spiked 19 percent to $3.87 early Friday after the announcement earlier in the week. If finalized, the transition to a bank holding company will also open the door for GMAC to the U.S. Treasury Department‘s TARP funds, the first leg of which was depleted by Treasury secretary Henry Paulson’s hefty Christmas gift to failing automakers GM and Chrysler Holding LLC–little stocking stuffers to the tunes of $9.4 billion and $4 billion, respectively. Talk of an additional $4 billion injection into GM suggests Paulson will have to go to Congress to plead the case for the release of the last $350 billion installment of TARP funds. “While the purpose of [the TARP] and the enabling legislation is to stabilize our financial sector, the authority allows us to take this action,” Paulson said of the automaker bailout. “Absent Congressional action, no other authorities existed to stave off a disorderly bankruptcy of one or more auto companies.” It has been said by various lawmakers including House speaker Nancy Pelosi, D-Calif., House Financial Services Committee chairman Barney Frank, D-Mass. and Federal Deposit Insurance Corp. chairwoman Sheila Bair that additional TARP funds should not be granted without some sort of result for struggling homeowners. It is unclear now whether an injection into the GMAC bank holding company–and its mortgage finance business Residential Capital LLC–will be considered sufficient aid for homeowners. Bankruptcy had appeared on the horizon for GMAC and its giant mortgage lending arm ResCap in recent weeks as investors had thus far balked at a $38 billion debt exchange needed to raise sufficient capital for the ailing financial giant to become a federally-chartered bank holding company. Analysts at Moody’s Investors Services have surmised that ResCap’s future is likely in doubt, regardless of GMAC’s access to TARP funding by becoming a bank holding company. Write to Diana Golobay at diana.golobay@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.