Ally failed to pass the Fed's bank stress test in March. Since the financial crisis, the Fed has been testing the largest U.S. banks each year to ensure they have a large enough capital cushion to survive an economic downturn.
The Detroit News reported Saturday that removing the Fed's restrictions will allow Ally to sell $1.3 billion in common stock and repurchase $5.9 billion in convertible preferred stock from the U.S. government.
"Upon completion of these actions, Ally have paid the U.S. Treasury $12.3 billion," said Ally, which -- when it was the auto lending company for General Motors -- was previously called GMAC.
The company received $17.2 billion from the government during the financial crisis to allow it to stay open and keep providing loans for car buyers.
After the transactions, the Treasury will own 64 percent of Ally. It currently owns 74 percent, the News said.