TARP Tales: Latest Congressional Hearings

The Unique Treatment of GMAC Under TARP

pbjork — Thu, 11 Mar 2010 10:30:58 -0500

GMAC Executive Pay Packages Questioned by TARP Panel

pbjork — Thu, 11 Mar 2010 10:29:07 -0500

March 11 (Bloomberg) -- GMAC Inc., the auto and home lender rescued by the U.S. government, may have overpaid its top executives after receiving taxpayer funds, according to a report by the panel overseeing the Troubled Asset Relief Program.

Pay packages for executives at GMAC and other TARP recipients “raise significant questions, which the panel will continue to study,” the Congressional Oversight Panel said in a report released today. “These include whether particular levels of compensation are either necessary or appropriate.”

SunTrust? Comerica? Fifth Third? What U.S. Bank Should Barclays Buy?

pbjork — Wed, 10 Mar 2010 10:43:27 -0500

Barclays is on the hunt for a retail bank to help it bolster its presence in the U.S., the WSJ reports.

No deal is imminent and the U.K. bank has only just started shopping around. Here are some possible candidates, and thoughts on which might make a target more or less attractive:

Tax on bonuses gets shunted aside

pbjork — Wed, 10 Mar 2010 10:42:35 -0500

U.S. Sen. Jim Webb's proposal to require a hefty tax on billions of dollars in

bonuses paid to some executives of financial institutions bailed out by the federal government hit a roadblock in the Senate on Tuesday.

Senate leaders set aside the Virginia Democrat's amendment, which would require a one-time, 50 percent tax on bonuses exceeding $400,000 that were paid to employees of 13 companies that received more than $5 billion from the Troubled Asset Relief Program, or TARP.

FDIC wants pension funds to prop up failed banks

pbjork — Mon, 8 Mar 2010 10:53:00 -0500

Over 140 U.S. lenders folded in 2009 alone. To remedy the financial void left in their wake, the Federal Deposit Insurance Corporation wants public pension funds, which safeguard the retirement funds of millions, to buy in part or in whole the banks that couldn't manage to keep their depositors' funds.

"Direct investments may allow funds such as those in Oregon, New Jersey and California to cut fees for private-equity managers, and the agency to get better prices for distressed assets," anonymous sources reportedly told Bloomberg News.

Small Businesses Await Details of Obama's Loan Plan

pbjork — Mon, 8 Mar 2010 10:44:29 -0500

When sales were hot two years ago, Ernest East had no idea how hard it would be to keep his business, Miz Lynn's Pies, alive for its 10th anniversary late last month.

When the recession cooled sales of his sweet potato pies, East ran from big banks to non-profit business loan programs for cash to tide him over.

Analyst: Regional banks may struggle to repay TARP

pbjork — Fri, 5 Mar 2010 12:28:34 -0500

DES MOINES, Iowa - An analyst downgraded two regional banks on Thursday and upgraded one, reflecting concerns that some may struggle to repay the federal government's bailout money, while others have repaid already and appear to be on their way to healthy profitability.

Sanford C. Bernstein & Co. analyst Kevin St. Pierre said redemption of the government's Troubled Asset Relief Program, or TARP, is a clear sign of a bank's ability to generate capital.

Bailout smackdown: University of Chicago vs. Hank Paulson

pbjork — Thu, 25 Feb 2010 12:44:44 -0500

It's an article of faith among the business and government elite that bailing out Wall Street prevented another Great Depression.

America had to do it, the thinking goes, to avoid a much worse fate.

How much worse? Try unemployment at 25 percent, not 10 percent. Try millions cast out of their homes, not hundreds of thousands. Try years of depression and pain for everyone, rather than recession and pain for many.

Will Wall Street Get a Bigger Return on Investment with Republicans?

pbjork — Thu, 25 Feb 2010 12:39:43 -0500

Wall Street does not like the political speech it's hearing from Washington, so it's using its Supreme-Court-granted right to make its money talk. Specifically, Wall Street is shifting more of its money to Republicans. But it's not immediately obvious that Republicans can win votes by siding with Wall Street. So Wall Street's bigger bet on Republicans may not end up paying off.

Ahead of the Bell: Bank of America TARP share vote

pbjork — Tue, 23 Feb 2010 09:49:58 -0500

Bank of America Corp. will ask shareholders Tuesday morning to authorize an increase to its amount of outstanding common stock as part of the bank's plan to pay back government bailout funds.

Bank of America in December agreed to repay $45 billion in loans it received from the government under its Troubled Asset Relief Program.

If passed, the number of authorized shares of the bank's common stock would increase by 1.3 billion to 11.3 billion.

Judge Accepts S.E.C.’s Deal With Bank of America

pbjork — Tue, 23 Feb 2010 09:49:18 -0500

In a ruling that freed Bank of America from some legal problems, a federal judge wrote on Monday that he had reluctantly approved a $150 million settlement with the Securities and Exchange Commission.

But even as the judge, Jed S. Rakoff of the Southern District of New York, approved the settlement, he delivered harsh words for the S.E.C., saying that the agreement was “half-baked justice at best.”

U.S. Treasury loan plan may exclude TARP watchdog

pbjork — Tue, 23 Feb 2010 09:48:08 -0500

WASHINGTON (Reuters) - A Treasury bailout watchdog has warned that excluding his office from oversight of a proposed $30 billion small business lending fund would be "terribly wasteful" and could put taxpayers at risk.

Neil Barofsky, special inspector general for the Treasury's $700 billion Troubled Asset Relief Program (SIGTARP), said in a letter to a senior Treasury official that he was "surprised" to learn last week that Treasury is proposing the new program operate outside his purview. The letter, dated Friday, was made public on Monday.

Bailout Anger Undermines Geithner

pbjork — Mon, 22 Feb 2010 10:15:42 -0500

WASHINGTON— Timothy Geithner's role in calming the financial crisis landed him the coveted job of Treasury secretary last year. That same résumé is now dogging him.

In his next test, Mr. Geithner will find out this week how lawmakers are treating one of his main goals—revamping the nation's financial regulations—when Senate Banking Committee Chairman Chris Dodd unveils his new bill. In Washington, where perception can take on the status of fact, the political woes facing Mr. Geithner are diminishing his authority.

Why It Took $642 Million In Fees To Dismantle Lehman

pbjork — Mon, 22 Feb 2010 10:14:03 -0500

Lehman’s bankruptcy is believed to be the largest in US history. Now, Bloomberg has reported that a new regulatory filing revealed that various consulting and legal firms and other lucky advisors that became part of the process which dismantled Lehman Brothers were paid a total of $642 million. The primary beneficiaries of this largess were Alvarez & Marsal LLC which provided a rent-a-CEO and management for which it received $233 million and law firm Weil Gotshal which was paid $150 million.

Obama to Unveil Additional Homeowner Aid

pbjork — Fri, 19 Feb 2010 10:07:29 -0500

LAS VEGAS—President Barack Obama is expected to announce plans Friday to provide an additional $1.5 billion to a state-assistance program for homeowners worst hit by the downturn in U.S. housing values.

The program, which Mr. Obama will announce in Las Vegas, is for states where the average home value for all homeowners in the state has dropped more than 20% from its value at the height of the housing bubble. Under the formula, five states have home-price declines steep enough to qualify them: Nevada; California; Arizona; Michigan; and Florida.

Umpqua bank repays $214 million in federal TARP money

pbjork — Thu, 18 Feb 2010 10:34:50 -0500

Umpqua Holdings Corp., parent company of Umpqua Bank, has repaid the $214.2 million it borrowed from the federal government under the Troubled Asset Relief Program.

Umpqua, the largest bank based in Oregon, paid another $13.5 million in dividends to the U.S. Treasury. Like all participants in the government's so-called Capital Purchase Program, Umpqua paid 5 percent annual interest on the Treasury money it received.

IRS Warns MetLife on AIG Purchase: Not So Fast

pbjork — Thu, 18 Feb 2010 10:30:26 -0500

All MetLife wanted to do was to buy American International Group’s Alico unit. But completing the $15 billion deal was never going to be easy, and it has recently become much more difficult.

According to the New York Times, the latest stumbling block has to do with taxes. While Alico is incorporated in the U.S., the bulk of its business is conducted in Asia.

Treasury Says New Loans By 11 TARP Banks Rose 13% in December

pbjork — Wed, 17 Feb 2010 10:15:05 -0500

Loan originations by 11 U.S. banks that received government financial assistance rose 13 percent in December from the prior month, the Treasury Department said today.

In its monthly survey of lending by the top recipients of taxpayer money from the $700 billion Troubled Asset Relief Program, the Treasury also said total loan balances fell 1 percent in the same month. The latest report does not include data from banks that repaid their TARP funds in June 2009, and future reports will phase out data from institutions exiting the rescue program, the Treasury said.

Elders of Wall St. Favor More Regulation

pbjork — Wed, 17 Feb 2010 10:08:39 -0500

Put aside for a moment the populist pressure to regulate banking and trading. Ask the elder statesmen of these industries — giants like George Soros, Nicholas F. Brady, John S. Reed, William H. Donaldson and John C. Bogle — where they stand on regulation, and they will bowl you over with their populism.

They certainly don’t think of themselves as angry Main Streeters. They grew quite wealthy in finance, typically making their fortunes in the ’70s and ’80s when banks and securities firms were considerably more regulated. And now, parting company with the current chieftains, they want more rules.

Equipping Financial Regulators with the Tools Necessary to Monitor Systemic Risk

pbjork — Tue, 16 Feb 2010 10:49:49 -0500

The witness on Panel One will be: The Honorable Daniel K. Tarullo, Member, Board of Governors of the Federal Reserve System. The witnesses on Panel Two will be: The Honorable Allan I. Mendelowitz, Founding Member, The Committee to Establish the National Institute of Finance; Professor John C. Liechty, Associate Professor of Marketing and Statistics, Smeal College of Business, Pennsylvania State University; Professor Robert Engle, Stern School of Business, New York University; and Mr. Stephen C.

Prohibiting Certain High-Risk Investment Activities by Banks and Bank Holding Companies

pbjork — Tue, 16 Feb 2010 10:49:14 -0500

The witnesses will be: The Honorable Paul Volcker, Chairman of the President’s Economic Recovery Advisory Board; and The Honorable Neal S. Wolin, Deputy Secretary, U.S. Department of the Treasury.

Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the committee clerk at 202-224-7391 at least three business days in advance of the hearing date.

Majority Statements

* Tim Johnson [view statement]
* Sherrod Brown [view statement]

Witnesses
Panel 1

Unwinding Emergency Federal Reserve Liquidity Programs and Implications for Economic Recovery

pbjork — Tue, 16 Feb 2010 10:48:01 -0500

Due to the inclimate weather in Washington, DC, the hearing originally scheduled for today, Wednesday, February 10 has been postponed. Because of the nature of the hearing, and the importance of the subject matter to the economy, the committee believes the statements that have been submitted to date should be made public. The Federal Reserve has already released Chairman Bernanke's statement, and below you can find the remainder of the statements. Note: these statements are not part of the committee's official record.

Hearing Statements:

PNC Financial Services Group ponders TARP warrants

pbjork — Tue, 16 Feb 2010 10:43:06 -0500

PNC Financial Services Group Inc. has paid back the government’s $7.6 billion investment through the Troubled Asset Relief Program’s Capital Purchase Program.

But PNC (NYSE:PNC) has until Feb. 25 to determine whether it will try to purchase the warrants on the government’s preferred shares or let the Treasury Department auction them off.

Warrants are options that give the holder the right — though not the obligation — to buy shares at a pre-arranged price.

Republican Breaks Rank on Finance Bill

pbjork — Tue, 16 Feb 2010 10:41:50 -0500

WASHINGTON—Republican Sen. Bob Corker bucked his party Thursday and began negotiations with Democrats on overhauling financial regulation.

Winning the first-term Tennessee senator's support is perhaps the White House's best chance of passing a financial-overhaul bill this year. Democrats need one Republican to reach the 60 votes required to pass legislation in the Senate. Democrats hope Mr. Corker's support also could bring along other centrist Republicans.

Section 105 Congressional Report

pbjork — Tue, 16 Feb 2010 10:12:47 -0500

Transactions Report

pbjork — Fri, 12 Feb 2010 10:45:25 -0500

US Senator Introduces Bill That Would Tax TARP-Firm Bonuses

pbjork — Fri, 12 Feb 2010 10:19:29 -0500

WASHINGTON (Dow Jones)--Sen. Sherrod Brown (D., Ohio) on Thursday introduced legislation that would slap a 50% tax on bonuses given to executives at firms that received funds from the Treasury Department's Troubled Asset Relief Program, or TARP.

Brown's bill would apply to all bonuses in excess of $25,000, an even stricter threshold than a similar bill introduced by Rep. Peter Welch (D., Vt.) in the House. Revenues from Brown's bill would go to fund a Small Business Administration direct-lending program.

Treasury Gets Better Returns for Bailout Warrant

pbjork — Fri, 12 Feb 2010 10:18:06 -0500

A Congressional panel that criticized the U.S. Treasury Department for failing to get the best price for warrants sold back to bailed-out banks now says the agency is getting higher returns.

The government netted 92 percent of the fair market value for warrants it received from 23 banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. after initial sales of the securities from 11 “relatively small” lenders last year brought in two-thirds of estimates, according to a report today from the Congressional Oversight Panel.

Commercial Real Estate Losses and the Risk to Financial Stability

pbjork — Thu, 11 Feb 2010 10:46:01 -0500

Transactions Report

pbjork — Wed, 10 Feb 2010 10:44:51 -0500