Uncle Sam is shutting down Chrysler Financial...and it's news to the folks at Chrysler Financial.

The Detroit News reports, "The Treasury Department said Thursday that Chrysler Financial is working to close its doors by the end of 2011." Official at Cerberus Capital Management, which owns and operates Chrysler's financing arm, however, "said they were unaware of any liquidation orders and that closing isn't part of their business plan."

The company was once the primary lending arm that provided financing to keep Chrysler dealers in operation and loans to customers who bought Chrysler vehicles. Its books were battered by the collapse of the auto market over the last several years, however, and the company was forced to accept a federal bailout loan earlier this year. Autoblog notes, "The lending arm paid back its $1.5 billion loan from the government's TARP program, but much of its dealer financing and loan operations were replaced by GMAC." Today, most Chrysler dealers work through GMAC for all of their needs.

The AP notes, "New Chrysler loans are going to GMAC, but Chrysler Financial continues to service loans that it made previously on Chrysler vehicles." Shutting down the company "will cost the battered Detroit area thousands of jobs as it struggles with an auto industry downturn and the bankruptcies and government-run restructurings of Chrysler Group LLC and General Motors Corp."

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