By Greg Robb

WASHINGTON (Dow Jones) -- The Treasury Department announced Friday that it will make a $1.5 billion loan to Chrysler Financial to finance new auto loans.

In a statement, the department said the loan was part of a broader program to make the domestic auto industry more financially viable.

Many Republicans are not happy that Treasury is using funds set up to rescue the financial industry to aid General Motors Corp (GM) and Chrysler.

They have asked President-elect Obama not to use any more funds to help specific industries.

So the Chrysler loan could be viewed as squeaking just under the deadline.

The Treasury said its five-year loan will be made to a special purpose entity created by Chrysler Financial.

It will be secured by a pool of newly originated consumer automotive loans.

Chrysler Financial had increased its appeal to gain the funds in recent weeks after GMAC LLC, the lender associated with General Motors received $6 billion in bank bailout funds in December.

The injection comes after General Motors and Chrysler, which is a division of buyout shop Cerberus Capital Management, succeeded in obtaining $17.4 billion in capital injections.

Of that package, $9.4 billion has been allocated to General Motors on Dec. 29. Chrysler has received $4 billion on Dec. 29, according to the term sheet and the auto giant expects an additional $4 billion from the second half of the $700 billion package expected to be released by Congress.

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