Lawmakers Want Federal Help On Consumer Car Loans

Michigan lawmakers intend to urge Federal Reserve Chairman and Treasury Secretary to use their regulatory powers to loosen up credit to help finance car loans.

WASHINGTON (AP) -- Michigan lawmakers on Thursday asked the government to take steps to make it easier for car buyers to get loans, in hopes of helping U.S. automakers ride out the financial crisis.

The state's entire congressional delegation wrote Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke asking them to quickly use their powers under the financial bailout to buy troubled assets from auto finance companies.

Democratic Rep. John Dingell also said automakers were considering asking the Federal Reserve for access to its discount window to provide low-cost credit.

"We are not ashamed to point out that this crisis that we have on credit did not begin in the auto industry, it began in the financial industry," Dingell said. "All we're trying to do is see to it that the financial industry which is being bailed out, also sees to it that relief is available to a critically important manufacturing and marketing industry."

Dingell, a longtime advocate in Congress for automakers, declined comment on whether the financial crisis was dire enough that it might lead to a bankruptcy filing by General Motors Corp., Chrysler LLC or Ford Motor Co.

"The situation is very serious with regard to all three of the manufacturing companies," Dingell said, describing an equally serious situation for auto suppliers and dealerships.

Michigan's congressional delegation represents thousands of auto workers and the home of GM, Ford and Chrysler. In the letter, they argued that the lack of liquidity in credit markets could cripple the auto industry. Many banks and auto finance companies have tightened credit standards because they can't borrow money to lend, or they have been reluctant to lend and risk defaults.

"They need to do for autos what they're doing for the mortgage industry," said Sen. Carl Levin, D-Mich.

The lawmakers said they may also try to expedite the availability of $25 billion in low-interest loans approved by Congress last month. Levin has said he may try to double the loan amount, which would help the industry retool plants and build fuel-efficient vehicles.

Provisions in the $700 billion bailout giving the government the ability to buy up toxic assets apply to auto financing companies, but lawmakers said they want speedier action.

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