General Motors Corp.'s (GM) potential restructuring plans are throwing a wrench into GMAC LLC's efforts to change into a stable bank.

GMAC, the former financing arm of the auto maker, hit with hefty losses of its own, turned itself into a bank in December. Its goal was to access federal funds. While its bank status dictates that GMAC loosen its ties to GM, a big chunk of GMAC's business is firmly interlaced with the auto maker's fortunes.

As GM shuts down dealers in an effort to save itself, GMAC could be left with loans to dealers who can't pay them off; moreover, some changes GM plans, such as killing off the Pontiac brand, could depress valuations in GMAC's book of leases and loans.

Over the longer term, GM's changes could help GMAC by weeding out weaker, less credit-worthy dealers.

GMAC funded 32% of the auto maker's retail sales in 2008 and provided 81% of the financing to GM dealers. The auto maker's struggles are complicating and undercutting GMAC's efforts to transition into a bank amid innumerable unknowns brought on by GM's uncertain future.

"We are in uncharted waters," says Christopher Wolfe, an analyst at Fitch ratings.

GMAC is jointly owned by GM and an investor group led by private-equity firm Cerberus Capital Management LP. The auto maker and the investor group will significantly scale back their ownership in GMAC as a condition of the lender becoming a bank-holding company.

GM outlined Monday a new turnaround plan that would leave the U.S. government controlling the auto maker, as it set up a showdown with bondholders that could determine whether the company lands in bankruptcy court. GM told bondholders it wants to swap up to $27 billion in unsecured debt for a 10% company stake. If bondholders tender less than 90% of the debt, GM is prepared to file for bankruptcy protection.

Also Monday, the United Auto Workers union and Chrysler LLC disclosed that the union would own 55% of that restructured car maker, while Fiat SpA would get 35% and the U.S. and lenders would own the rest. The government-led restructuring of Chrysler may include folding the auto maker's former finance arm into GMAC, The Wall Street Journal reported Tuesday.

These restructuring efforts come against a backdrop of steep declines in auto sales, an economic recession and rising unemployment that's crippling the ability of U.S. consumers to honor their debt obligations.

"With the level of uncertainty, it's really hard to gauge what will happen," says Wolfe. "A big question we have is 'what will survive out of GM and what does that mean for GMAC?'"

GM, as part of its turnaround plan, said it would reduce its U.S. dealers to 3,605 by 2011, down 42% from 2008 - on average winnowing its dealer ranks by about 130 outlets a month for the next 20 months.

GMAC lends to GM dealers who typically use these funds to stockpile new vehicles on their showroom floors. The lender had $24.13 billion of such loans on its books in 2008. GMAC earned revenues of $1.4 billion last year on these type of loans to dealers.

A concern is that shuttering dealerships in a hurried fashion could leave GMAC stuck with unsold inventory if the lender is forced to repossess vehicles when dealers can't pay up. In such an instance, GMAC may have little choice but to auction off the cars, driving down their prices. Lower prices, in turn, would drive down values of GMAC's existing books of loans and leases.

This "will have a very negative impact," says Wolfe.

GM also confirmed it would kill its Pontiac brand. Analysts worry this would lower prices on used Pontiac vehicles as buyers discount models because of concerns about spare parts, servicing and warranties.

Values on used cars matter a great deal to GMAC. After leases expire, GMAC takes the vehicles back and sells them at used-car auctions, hoping to make a profit. But falling resale values can force lenders such as GMAC - saddled with inventories of thousands of these vehicles as they come off leases or are repossessed from owners unable to keep up with payments - to sell them at a loss. GMAC took a $1.2 billion impairment charge on its operating lease portfolio last year.

Yet another concern is the impact on GMAC's lending business as GM trims down; fewer cars produced could mean fewer cars financed.

"A significant portion of our customers are those of GM and GM dealers and other GM-related employees," noted GMAC in its annual report. "As a result, a significant adverse change in GM's business...would have a significant adverse effect on our profitability and financial condition."

- By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com