Washington in 5 Minutes

FEDERAL RESERVE

GMAC flunks bank stress test

The Federal Reserve said Monday that GMAC Inc. is the only one of 19 stress-tested banks that needs more capital to withstand losses if the economy softens.

GMAC, a crucial player in the U.S. auto industry, has been unable to raise the $11.5 billion regulators said it needed after stress test results were announced in May. The Fed says the finance company is expected to close the gap with more money from the $700 billion financial bailout.

GMAC, already the recipient of $12.5 billion in taxpayer infusions, is negotiating with regulators over how much more it will receive.

The Detroit-based lender expects to meet its additional capital requirements under the stress test program, and is in “active dialogue” with Treasury about its next round of bailout money, said GMAC spokeswoman Gina Proia. Those funds will be used to fulfill the stress test requirement “and not to resolve any new matter related to our business,” she added.

GMAC provides wholesale financing to many General Motors Co. and Chrysler Group LLC dealerships to pay for the vehicles on their lots. The company also operates a mortgage lending unit - Residential Capital - which has been pummeled by the housing market downturn. It runs an insurance unit and an online banking unit called Ally Bank.

JUDICIAL NOMINEES

Senate tips Richmond court to Democrats

The Senate has confirmed U.S. District Judge Andre Davis to join the federal appeals court based in Richmond.

Monday’s vote tips the once conservative court in favor of Democratic appointees and is a key step in President Obama’s effort to remake the federal judiciary.

The Fourth U.S. Circuit Court of Appeals now has six judges nominated by Democratic presidents, compared with five nominated by Republicans.

The vote was 72-16 to elevate the Baltimore judge, whose nomination has been pending before the Senate since June. Democrats have accused Republicans of stalling a vote on Judge Davis and other judges.

Judge Davis is the sixth of Mr. Obama’s judicial nominees to be confirmed.

CONNECTICUT

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