The Treasury Department will lend Chrysler’s financing arm $1.5 billion to encourage the struggling auto-loan market, the Washington Post reports today. The 5-year loan comes at an interest rate of about 1.36%, and carries limits on executive compensation: Chrysler Financial will have to cut its bonus pool by 40%. Chrysler responded by announcing a 5-year, no-interest loan program for car buyers.
“We appreciate the Treasury Department’s support and their commitment to increase the availability of financing for consumers,” a Chrysler Financial exec said. “This funding will provide us with increased capacity to help Chrysler LLC and our dealers make new loans available to qualified consumers and sell more cars and trucks.”