34 banks don't pay their quarterly TARP dividends

The U.S. taxpayers' investments in smaller banks are increasingly at risk.
In a sign that more banks are under great pressure from the recession, 34 financial institutions did not pay their quarterly dividends in August to the Treasury on funds obtained under the Troubled Asset Relief Fund (TARP). The number almost doubled from 19 in May when payments were last made, and also raised questions about Treasury's judgment in approving these banks as "healthy," a necessary step for them to get TARP funding.

"The banks are not paying their dividends because they are worried about preserving capital," says Eric Fitzwater, associate director of research at SNL Financial.

The Treasury Department says it cannot force an institution to pay dividends. "For some banks, it may be prudent to exercise their right not to pay dividends in a particular month, and we respect their right to do so," says Meg Reilly, a Treasury spokeswoman. "To draw any broader conclusions about the state of the banking sector from one month is highly premature and speculative."

However, a lot of smaller banks are already under stress. Weighed down by foreclosures and delinquencies, 98 banks have failed so far this year, vs. 25 for all of last year. Besides insurer American International Group and lender CIT Group, most of the other non-payers are smaller institutions that received $400 million or less in TARP funds.

Top Republican on the House Financial Services Committee, Rep. Spencer Bachus, R-Ala., says: "We must ensure taxpayers are repaid."

Some say Treasury might have been too hasty in approving some banks for TARP funds.

"Perhaps the Treasury made assumptions that were a little bit too rosy," says Walter Todd, who invests in banks at Greenwood Capital. "My question is also whether the Treasury is staffed adequately to handle this tremendous undertaking."

Treasury has given $365 billion to 700 institutions from TARP. AIG, to which the government has pledged $180 billion, has accumulated $1.6 billion in unpaid dividends. And CIT, which received $2.3 billion from TARP, said in a regulatory filing that it is restructuring its debt and seeking approval from bondholders for a pre-packaged bankruptcy. If that happened, it would wipe out the entire government investment.

http://www.usatoday.com/money/industries/banking/2009-10-07-banks-tarp-dividends_N.htm?csp=34

Views: 26

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

Comment by Tara on October 9, 2009 at 5:39pm
They're not going to pay it back because they took the money and ran, the bastards!

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

FREEDOMROX posted a blog post
14 minutes ago
Doc Vega posted blog posts
2 hours ago
Doc Vega commented on Doc Vega's blog post The Many Keys to Deadly Secrecy in our Government
"cheeki kea, thanks so much for your support."
5 hours ago
FREEDOMROX posted a blog post
yesterday
cheeki kea favorited Doc Vega's blog post The Many Keys to Deadly Secrecy in our Government
yesterday
cheeki kea commented on cheeki kea's photo
yesterday
cheeki kea posted a photo
yesterday
cheeki kea replied to cheeki kea's discussion Tartaria
"Greetings to you John, You're right and it didn't take long for those manuals to totally…"
yesterday
Doc Vega posted a blog post

The Many Keys to Deadly Secrecy in our Government

We now know thanks to the legislation of FOIA access to federal documents and evidence and the…See More
Wednesday
Less Prone favorited tjdavis's photo
Wednesday
Less Prone favorited rlionhearted_3's photo
Wednesday
John Miller commented on rlionhearted_3's photo
Thumbnail

Another incredibly Stupid!! What, no mirrors?

"Brutal post... not sure it’s helping anyone though."
Tuesday
John Miller replied to cheeki kea's discussion Tartaria
"Tartaria: the empire that built half the world's cathedrals, then vanished because someone…"
Tuesday
Burbia commented on rlionhearted_3's photo
Thumbnail

Another incredibly Stupid!! What, no mirrors?

"This movie portrayed plastic surgery as absurd. I guess the numbers in the real world are growing."
Tuesday
Burbia commented on tjdavis's photo
Thumbnail

Redux

"Ah yes, General Jussitri Smolletkov. Good tongzhi. Good tongzhi."
Tuesday
Doc Vega posted a blog post

Unusual Discoveries and Headlines

Archaeologists have discovered an ancient tool dated to be 6,000 years old, but even more…See More
Monday
tjdavis posted a video

Inside Texas HOMELESS HELL – Even Cops Don't Dare Step In! - Documentary

In this powerful documentary, we explore the escalating Texas homeless crisis 2025, where cities and rural areas alike are witnessing a disturbing rise in th...
Monday
tjdavis posted a photo
Monday
John Miller replied to MAC's discussion BREAKING! UFO whistleblowers drop BOMBSHELL on D.C. | Redacted with Natali and Clayton Morris
"Crazy how these whistleblower stories are finally making it into bigger conversations. Makes you…"
Sunday
Burbia favorited tjdavis's blog post The Dems Love Their Demons
Sunday

© 2025   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted