Ally, which is 73.8 percent owned by the U.S. government, is already in the process of selling its mortgage unit, Residential Capital, and sale of other assets could happen even as that continues, one of the sources said.

The logical universe of buyers for Ally's core operations include big banks such as JPMorgan Chase & Co (JPM.N), Toronto-Dominion Bank (TD.TO) and Wells Fargo & Co (WFC.N), as well as auto makers such as General Motors Co (GM.N), the sources said.

The discussions on whether to sell the auto lending operations or its online bank are at very early stages, the sources said. They said no decisions have been made on what path to pursue, with an IPO also remaining a possibility.

It wasn't clear what these assets would be worth in a sale. Last year sources said Ally was planning to raise around $6 billion in common stock and convertible securities through a public offering though the size of that offering was not disclosed.

TD declined to comment, while Ally, JPMorgan, Wells and GM were not immediately available for comment on Thursday evening.

The talks about a potential sale of Ally come as the subject of bailouts becomes a contentious political issue in an election year, likely mounting pressure on the U.S. government to show progress at Ally and others that received taxpayer-funded rescues.

U.S. presidential hopeful Mitt Romney has criticized President Barack Obama's $81 billion auto industry bailout in 2009 as "crony capitalism" that rewarded unions and other political allies of the president.

Ally, the former lending arm of General Motors, ran into trouble during the financial crisis as its mortgage loans soured, forcing the government to inject more than $17 billion into it in 2008-2009 to keep the company afloat. Ally has said it has since repaid the government $5.4 billion.

The government took a controlling stake in Ally, and cut the stakes of its other shareholders. Private equity firm Cerberus Capital Management CBS.UL now owns 8.9 percent of the company, General Motors Trust 5.9 percent and General Motors itself 4 percent.

Ally put forward a plan to go public in June last year. But it had to postpone the IPO as problems mounted at ResCap and market conditions deteriorated in the wake of the European sovereign debt crisis.

The company's problems include getting dragged into a nationwide furore over faulty housing foreclosures and the mishandling of requests for loan modifications. Earlier this month it was among five big U.S. banks that agreed to a $25 billion government settlement.

The market for IPOs also remains difficult, thanks in part to the euro zone debt crisis, leaving Ally and the Treasury to think about other alternatives.

Sales in recent months of companies such as ING Groep NV's (ING.AS) U.S. online banking unit to Capital One Financial Corp (COF.N) and MetLife Inc's (MET.N) online bank to General Electric Co (GE.N) is giving hope to the company that a straight sale may be an easier way to go than an IPO.

Ally has already started talks to sell ResCap through a process that could also involve a bankruptcy filing for the unit, the sources said.

Bidders interested in a deal for ResCap include Fortress Investment Group (FIG.N), Cerberus, and a consortium of Centerbridge Partners and Leucadia National, the sources said, adding the process was moving forward quickly.

Centerbridge and Fortress declined to comment. Cerberus and Leucadia were not immediately available for comment.

POTENTIAL BUYERS

Banks that are looking to acquire assets to match their growing deposit base and those with already sizeable auto lending operations could make for ideal buyers of Ally Bank, which has been advertising aggressively to attract customers, and the auto lending business.

TD struck a deal late in 2010 to buy Chrysler Financial for $6.3 billion to become one of the biggest bank-owned auto lenders in the United States, while JPMorgan and Wells Fargo already have auto lending operations.

Besides these lenders, Ally's assets could also draw interest from automakers who want captive lending units.

"There's a lot of strategic value in the pieces to many different potential buyers," one of the sources said.

GM had been interested in buying some of Ally's auto lending operations as it sought to boost its ability to provide financing for dealers as well as lease deals to lure new car buyers, the sources said.

In July 2010, it bought AmeriCredit - now called GM Financial - for $3.5 billion, giving GM dealers a way to sell more cars and trucks by providing easier access to subprime loans for people with spotty credit records.

But that deal did not address a separate problem for GM - if its dealers are unable to access credit or have to pay high rates, they risk being unable to obtain vehicles.

Other major automakers, including Ford Motor Co (F.N) and Toyota Motor Corp (7203.T), have financing arms offering loans to their own dealers, often at subsidized rates that amount to a marketing expense.

(Reporting by Paritosh Bansal and Soyoung Kim; Editing by Martin Howell)

• A Permanent Economic Emergency