Thread: GAO: Banks Paying Back TARP with Federal Money

GAO: Banks Paying Back TARP with Federal Money

Emac's Bottom Line
Written By Elizabeth MacDonald

The Government Accountability Office says in a new report that banks that have repaid the Treasury Department's TARP bailout program did so with funds they received from other federal rescue programs.

The GAO’s finding undercuts the Treasury’s prior statements that effectively assert the Troubled Asset Relief Program has earned a profit for taxpayers. Specifically, the GAO says that, according to its new review, “as of January 31, 2012, 341 institutions had exited,” TARP, almost half by repaying...with funds from other federal programs.” For more, click here.

The GAO also finds that banks continue to stream out of TARP, but the number that are reneging or missing their required]dividend and interest payments back to the Treasury program has risen.

A Treasury spokesman said that Congress specifically required that banks who participate in TARP could also participate in the Small Business Lending Fund. He also noted past comments from Assistant Secretary for Financial Stability Tim Massad, who said “we will continue to work to wind down the program in a way that ensures financial stability and protects the interest of taxpayers.”
The GAO adds that this issue of round-tripping federal bailout money arises with small banks, as the government essentially replaced their TARP funding with the new federal Small Business Lending Fund enacted in 2010, which GOP Congressmen have dubbed “TARP 2.0.”

FOX Business has reported that a GAO review of Treasury statements and press releases on TARP may bury the bad news about potential losses in the program, notably from bailouts of General Motors, AIG, and Ally Financial. The GAO has urged Treasury to improve disclosures on potential future losses, not just income expected from TARP bailouts.

Under what’s called TARP’s “capital purchase program,” where Treasury invests in bank securities, Treasury invested “almost $205 billion in 707 eligible financial institutions between 2008 and December 2009,” the GAO says.

Specifically, the GAO says that, as of January 31, 2012, the Treasury had received $211.5 billion from its TARP investments, exceeding the $204.9 billion it had disbursed.

Of that amount, $16.7 billion remains outstanding, and most of these investments were concentrated in a relatively small number of institutions.

But the GAO adds that, as of November 30, 2011, Treasury estimated that the capital purchase program, which involves TARP investments in banks, “would have a lifetime income of $13.5 billion after all institutions exited the program.”

The GAO adds that, as of November 30, 2011, the number of banks and companies “that had missed their quarterlypayments rose to 158, a marked increase from 8 in February 2009,” even though the TARP program “had fewer participants.”

And the GAO found that the number of companies in the program “designated as problem banks — that is, demonstrating financial, operational, or managerial weaknesses that threatened their continued financial viability — also rose from 47 in December 2009 to 130 in December 2011.”

The GAO warns: “Institutions that continue to miss payments and problem institutions may have difficulty ever fully repaying their CPP investments.”

Read more: Fox Business

“Bankers own the earth; take it away from them but leave them with the power to create credit; and, with a flick of a pen, they will create enough money to buy it back again... If you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit.”
- Sir Josiah Stamp, Director, Bank of England, 1940.


“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” - Thomas Jefferson




Famous Quotes about Government & Banking Control and the New World Order

The following is a four page list of quotes by famous individuals that reflect their knowledge of Government, Banking, Military, and Media control - or otherwise known as the "New World Order."

http://amtruth.com/NWOquotes1