Fed asks U.S. banks to submit TARP repayment plans
Nov 24, 2009 Make Money Online
The U.S. Federal Reserve this month asked nine banks that were part of “stress tests” conducted earlier this year to submit plans to repay money injected under the Troubled Asset Relief Program (TARP), Bloomberg said, citing a person familiar with the situation.
The banks may be allowed to repay the TARP money soon if they have been able to raise common equity recently and would continue to exceed capital buffers that were set in the stress tests, the news agency cited the person as saying.
The Federal Reserve did not immediately return a Reuters email seeking comment that was sent outside of regular U.S. business hours. Read the rest of this entry »
Tags: Federal Reserve Bank, GMAC LLC, payment, repayment, TARP, Troubled Asset Relief Program, US Bank
CIT debt swap could cost U.S. more than $1.8 billion
Oct 3, 2009 Make Money Online
NEW YORK (Reuters) – If CIT Group (CIT.N) exchanges its debt under an offer aimed at averting a bankruptcy filing, the U.S. government could lose nearly 80 percent of its $2.33 billion investment in the troubled commercial lender.
A likely $1.8 billion loss would be another black eye for the United States’ Troubled Asset Relief Program. A government official said last week that TARP has saved the financial system from collapse, but fell short of some of its other goals.
Some parts of the program may lose money, added the official, Neil Barofsky, special inspector general for the government’s TARP program.
The U.S. government bought $2.33 billion of CIT preferred shares in December 2008 as part of the TARP program. In July, CIT sought additional government support, but those talks broke down and the company was forced to work out its funding issues on its own.
Under the exchange offer, investors in preferred shares and securities that get exchanged into preferred shares will end up with 97.5 percent of CIT’s shares, which should equal about 15.7 billion shares. That means that the total number of outstanding CIT shares should be about 16.1 billion. Read the rest of this entry »
Tags: AIG, American International Group Inc, Billion Dollar, CIT Group, CIT.N, Commercial Lender, Commercial Loan, debt, Money, TARP, United States' Troubled Asset Relief Program
Some U.S. bailout funds won’t be recovered: watchdog
Sep 24, 2009 Make Money Online
By David Lawder
U.S. taxpayers will probably never recover all of the hundreds of billions of dollars invested to bail out financial firms, automakers and homeowners, a key watchdog for the program said on Thursday.
Neil Barofsky, the special inspector general for the U.S. Treasury’s $700 billion Troubled Asset Relief Program (TARP), said in prepared U.S. Senate testimony that the bailout fund played a significant role in stabilizing the financial system, but it may never fulfill certain policy goals.
“The progress on meeting the goal of ‘maximizing overall returns to the taxpayer’ is unclear,” Barofsky said in testimony to be delivered to the Senate Banking Committee.
“While several TARP recipients have repaid funds for what has widely been reported as a 17 percent profit, it is extremely unlikely that the taxpayer will see a full return on its TARP investment.”
For example, $50 billion in funds allocated to modify mortgages to reduce monthly payments will never yield a direct return, while full recovery of the more than $80 billion spent to prop up the U.S. auto industry “is far from certain,” Barofsky said.
According to the inspector general’s analysis, Treasury has earmarked $699 billion of the funds to 12 different programs, including a $134.5 billion cushion of funds available for future use. It has disbursed or committed to disburse $445 billion. Read the rest of this entry »
Tags: Fund, TARP, Taxpayer, Troubled Asset Relief Program
Banker lived it up in bank-owned Malibu house: report
Sep 12, 2009 Make Money Online
By Clare Baldwin
A community watchdog group expressed outrage and Wells Fargo said it was launching an investigation after a newspaper reported that a senior exec threw lavish parties at a beachfront Malibu house owned by the bank.
“This is the ultimate example of dancing on the shattered dreams of the millions of Americans who’ve lost their homes. They should be ashamed of themselves,” said Association of Community Organizations for Reform Now spokesman Scott Levenson.
According to the Los Angeles Times, residents said Cheronda Guyton, a Wells Fargo senior vice president responsible for foreclosed commercial properties, spent weekends in the Malibu Colony house throwing “eye-catching” parties, one of which had guests arriving in a yacht.
Guyton was also issued the same parking permit as is given to Colony residents, the Times reported.
Guyton’s alleged personal use of the property incensed advocacy groups and drew scrutiny from the lender’s internal checks. Read the rest of this entry »
Tags: bank, buy house, Citigroup, household, New York Stock Exchange, owner, Stock Market, TARP, US goverment, US lender, Well Fargo
