The Federal Reserve approved GMAC as a bank holding company on Christmas Eve, allowing GMAC, GM’s financial arm, to tap into federal rescue funds for financial services and further shore up GM’s bank balance.

GMAC provides about 75% of financing for GM dealerships and has been frozen out of the credit markets since taking a $7 billion loss earlier this fall.

GM owned most of GMAC until last year, when it sold the majority stake to a private equity firm led by Cerberus. As part of today’s deal, GM will reduce its holdings in GMAC to less than 10% of total shares.

GMAC’s application was approved despite not meeting capital requirements when it applied in November.