Chrysler Financial to close by end of 2011
DETROIT — The U.S. Treasury Department says Chrysler Financial will go out of business by the end of 2011, costing the battered Detroit area thousands more jobs.
The automaker's former financial arm is in the process of shifting much of its loan business to GMAC under orders from the government.
GMAC is becoming the preferred lender for both General Motors Co. and Chrysler Group LLC.
The Treasury Department says in a letter to Chrysler Financial that the lender is liquidating its business and repaying lenders and investors.
Chrysler Financial last summer employed more than 3,900 people, many at its headquarters in Farmington Hills, Mich.
New Chrysler loans are going to GMAC, but Chrysler Financial continues to service loans that it made on Chrysler vehicles.
Banks cut back from emergency fed funds
WASHINGTON — Banks cut back on loans from the Federal Reserve's emergency lending program over the past week, a sign some credit problems are easing as the economy recovers.
The Fed on Thursday said commercial banks averaged $23.8 billion in daily borrowing over the week that ended Wednesday. That was down from $27.4 billion in the week ended Oct. 14.
The identities of the financial institutions are not released. They pay just 0.50 percent in interest for the emergency, overnight loans.
Banks also trimmed their use of other credit programs set up to ease the financial crisis, including one aimed at boosting the availability of short-term financing crucial for paying salaries and supplies.
In other news
American Express Co. reported its eighth straight quarter of falling profits as consumers spent and borrowed less. The New York-based credit card company reported a 22 percent drop in earnings. For the period ended Sept. 30, American Express said earnings after accounting for preferred stock dividends and other items totaled $632 million, or 53 cents per share. That is down from $810 million, or 70 cents per share, a year earlier.
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