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News out of Washington, D.C. is pretty grim for GMAC Inc. Automotive News is reporting that a congressional panel said today that the company still lacks a business plan even after receiving more than $17 billion from the government, and that the Treasury Department has been lax about requiring the bank to repay taxpayers.

The Congressional Oversight Panel, which was created to oversee Treasury’s spending of funds frokm the Troubled Asset Relief Program said, “The panel is deeply concerned that Treasury has not required GMAC to lay out a clear path to viability or a strategy for fully repaying taxpayers.” The panel also suggested that Treasury might wish to consider breaking up GMAC and merging the company’s automotive finance department back into General Motors, Co.

Such a move would restore GM’s financing operations to a model used by many other automakers, the panel, which is headed by Harvard University law professor Elizabeth Warren, said in its statement. Its report also said that GMAC lost $8.3 billion on its mortgage business last year, which represents more than 80% of its total net losses.

In a respone issued by GMAC, the company said, “We appreciate the panel’s responsibility to analyze history; however, GMAC’s management team is focused on the future. That includes continuing to provide the highest level of service to auto dealers and consumers in support of our auto partners, returning GMAC to a high level of profitability, and repaying the U.S. Treasury.”

Also addressing the issue was the Treasury Department itself, which released a statement saying, “Treasury continues to be a reluctant shareholder and to manage its investment in GMAC in a hands-off commercial manner consistent with the administration’s established principles that guide Treasury’s management of financial interests in private firms.”

Addressing previous decisions not to restructure GMAC, Treasure said, “After considerable analysis and deliberation, Treasury viewed the course taken as the least costly and least disruptive of all the options available.” Treasury maintains that support of GMAC was necessary because of the company’s dominant role in floorplan financing and that failure to do so would have undermined the government’s investments in the auto industry.

According to Automotive News reporters:

The congressional panel found that the government missed chances to increase accountability and ensure repayment of taxpayers’ money with its early decisions to rescue GMAC rather than pursue other options as part of a broader auto industry bailout.

Filed under: Cash or Credit, GM, In the News by Mel