I’m torn on the news that GM has agree to acquire a sub-prime auto lender, ostensibly with taxpayer funds it received in last year’s bailout.

On one hand, the cash the government injected into the company was meant to keep it out of bankruptcy and employing workers, not to finance its deals. That’s pretty straightforward. But, on the other hand, subprime lending is harmful to consumers – the same consumers that, as taxpayers, own a good amount of GM.

One way or another, lenders are going to continue to be in the business of peddling exploitative loans to unwitting people, so I guess the average taxpayer might as well have a small stake in a company that’s trying to bilk him and his neighbors out of their money.

But in all seriousness, and in the interest of balance, perhaps the acquisition will make the company more valuable and prop up its forthcoming IPO, both of which are in taxpayers’ best interest. And perhaps it’s unfair to categorize all sub-prime lending as exploitative – soon, there will be a strong consumer protection watchdog to help society grapple with the sub-prime lending industry.

(Update: Felix Salmon has some commentary on the deal. He’s skeptical, too.)

Either way, there’s no visible reason to suspect the deal won’t close later this year, and expect it to generate a good amount of controversy, not because of the material impact of the deal itself but rather because of the politics behind it.

GM’s chief financial officer gave an interview to explain the deal, and since Bloomberg’s stingy web site won’t let me embed it here, you’ll have to click through to watch it.