GMAC, the financing arm of General Motors (GM), announced Friday that Chairman Erza Merkin is resigning from the board.

In a press release, GMAC said it’s making changes to its board and that the new seven member board will consist of the GMAC CEO, one representative from FIM Holding, two directors appointed by a trust to be formed by the Treasury Department and three independent directors elected by the board.

"I am pleased that GMAC has successfully completed its conversion to a bank holding company and look forward to GMAC's accomplishing its goals," Merkin said in a statement.  

Calls for Merkin to leave GMAC's board have grown louder in recently after it was disclosed that Merkin’s hedge funds lost billions of dollars on investments with disgraced money manager Bernard Madoff. 

Merkin closed his $1.5 billion Gabriel Capital fund in December after disclosing losses due to Madoff. New York University  sued Merkin for allegedly turning over his investment responsibilities to accused Ponzi-scheme mastermind Bernard Madoff claiming it lost as much as $24 million.

The day before Christmas, the Federal Reserve granted GMAC bank holding status, allowing it access to government lending programs and helping it stave off bankruptcy. It has lost $7.9 billion over the last five quarters.