The US Federal Reserve's approval should allow GMAC to continue financing loans for General Motors cars.
GM Chief Executive Rick Wagoner said last week that GMAC's difficulties were "hammering" the car maker's ability to sell autos.
"In light of the unusual and exigent circumstances affecting the financial markets ... the board has determined that emergency conditions exist that justify expeditious action on this proposal," the US Fed said.
Analysts said earlier this month that without bank holding status, GMAC could have trouble staying solvent.
But bank status comes at a cost for GMAC's majority owner, private equity group Cerberus and its minority owner GM.
Both must cut their stakes in the finance company to comply with US bank regulations that prevent many companies from owning too big a share of a bank.
GMAC is getting the go-ahead to become a bank holding company just days after GM and Chrysler, which is owned by Cerberus, were promised public money from the US Treasury-run financial bailout fund to stave off potential bankruptcy.
GMAC has struggled as the credit crunch has lifted its borrowing costs sharply, and the value of many of its assets has plummeted. It has lost $US7.9 billion ($11.5 billion) over the last five quarters.
It was forced to curtail financing for car dealerships and for consumer purchases of new GM cars and trucks in recent months.
Cutting back financing compounded the sales slump at GM, whose sales fell 41 per cent in November.
Although GMAC completed a $60 billion debt restructuring in June, it launched another debt exchange last month designed to help it raise capital in part through giving debtholders preferred stock.
However investors have so far agreed to exchange 58 per cent of the company's debt, less than the 75 per cent GMAC hoped for.
A GMAC spokeswoman called the approval a "key turning point in our 89-year history.
"GMAC believes becoming a bank holding company is the best long-term solution to provide automotive and mortgage financing to consumers and businesses, including auto dealers," spokeswoman Gina Proia said.
A majority of GM dealers had depended on GMAC, the largest auto finance company in North America, for financing of their own inventory and consumer purchases even after GM sold a 51 percent stake in GMAC to Cerberus in 2006 for $7.4 billion.
GM retains the remaining 49 percent.
GM and Cerberus will have to trim back their stakes to no more than 10 percent and 14.9 percent, respectively, to comply with Fed rules that are meant to prevent companies from using banks to fund their businesses.
Detroit-based GMAC already has a banking unit that offers certificates of deposit and online savings accounts, but becoming a bank holding company will make it eligible for government support, including guarantees of new debt that it issues and access to emergency borrowing.
The company could also apply for billions of dollars of capital under the US government's $US700 billion financial rescue program, and will be able to rely on the Fed as a lender of last resort.
Bailout is relief for automakers, but not for all
PBL to get $335m cash boost
