The U.S. government now has an equity stake in auto lender GMAC Financial Services after providing $12.5 billion in aid to keep loans flowing to buyers of GM and Chrysler cars.

The Treasury Department said it now holds a 35.4 per cent stake in GMAC, after exchanging an $884-million loan it made to General Motors for that equity under an earlier agreement.

GM filed for Chapter 11 bankruptcy protection on June 1,a historic move designed to remake the automaker as a smaller and leaner company, that also made the federal government its principal owner with a 60 per cent stake.