GMAC's performance shows that we're not out of the woods yet

It's been an interesting year for GMAC, if interesting means humbling.

Back in May, the government conducted a series of stress tests and determined that 10 of the largest 19 banks needed to have more capital, if they were going to survive any more economic troubles that might come our way. Then, the 10 were given six months to raise a grand total of $74.6 billion in capital.

Well, here's the good news. Monday, the Federal Reserve announced $77 billion was raised.

But the bad news involves the bank hold company, GMAC Financial Services, the 14th largest bank and the lending device used by many Americans to pay for their cars -- those cars that are built by General Motors and Chrysler. GMAC, which is now 35% owned by the American government, has fallen short of raising its required $11.5 billion and will need what will be its third loan from the U.S. Treasury, which it will likely get through the TARP Automotive Industry Financial Program. That will mean American taxpayers will own even more of GMAC Financial Services.

GMAC is believed to need $5.6 billion in capital.

And we don't exactly own a company that's flourishing.

For instance, earlier this year, GMAC's commercial real estate lending company, GMAC Commercial, changed its name to Capmark Financial Group to distance itself from the tainted GMAC brand. It didn't work. Capmark filed for bankruptcy a few weeks ago.

GMAC also changed the name of its bank, GMAC Bank, to Ally Bank, hoping that customers would hear the friendly word Ally (which means friend) and dissociate that from GMAC. The company has made a big splash on TV with its commercials -- you know, the banker offers a toy pony to one girl, and a real one to another. When the little girl with the toy complains, the banker scolds her for not reading the fine print. Yeah, that's GMAC. Or was. And still is. Just not in name.

Er, anyway, while Ally Bank seems to be doing pretty well and is largely a bright spot for GMAC, not everything is rosy. When they began offering higher rates to the public, much higher than their competitors, critics, like the American Bankers Association, complained, saying that it was far too easy for Ally to be generous, thanks to the government loans they had received.

The Federal Reserve agreed and has since ordered Ally to lower bank-deposit rates and to reduce the amount of its car loans.

The Wall Street Journal (subscription required), recently half-joked that GMAC appeared to be cursed. The real problem, of course, isn't that it has a cloud of doom over it; it's that much of GMAC's lending model is around auto financing, and of course, the car industry, Cash for Clunkers aside, has been in pretty dire shape in the last year.

Commercial real estate has been struggling for some time, too -- or haven't you noticed the occasional shopping malls that, with their closed and shuttered stores, practically look like ghost towns -- so the bankruptcy wasn't a major surprise. Really, none of GMAC's problems are a shock to anyone following the Great Recession. You would expect a company so deeply invested in the more problematic parts of our economy to have trouble making a comeback.

But that's why if you want a dependable barometer on how the economy is doing, look to GMAC Financial Services. The day it can make a profit without American taxpayers propping it up is the day we may be able to truly put this recession behind us.

Geoff Williams is a regular at WalletPop, often writing about banking issues. He also is a frequent presence at AOL Small Business and is the co-author of the upcoming book, Living Well with Bad Credit.