TARP winding down; many banks still owe funds
Jan. 2, 2014 – The Treasury Department noted on Monday that it is close to winding down the Troubled Assets Relief Program even though many banks receiving TARP funds have yet to repay them.
Cato Institute’s Mark Calabria said that “out of 707 banks and thrifts that took TARP bailout, only 230 have paid it back in full without use of some other government funds.”
Also, a report released last year by the Special Inspector General for TARP found that of the 332 banks that participated in the Treasury Small Business Lending Fund program, 137 of them used more than half of the $4 billion disbursed to help fund their exits from TARP, not to provide much-needed small business loans.
During the financial crisis, credit unions continued to serve Main Street – as they are doing now – through small-business loans. These loans have grown to $44.6 billion, by 9.3 percent, in the 12-month period ending this September. By contrast, banks’ small-business loans have decreased 0.5 percent to $649.4 billion for the same period.
NAFCU is working to win an increase in credit union’s statutory member business loan cap. More MBL authority would help credit unions do more to support their member small businesses and grow jobs.
The association is urging action on H.R. 688, the “Credit Union Small Business Jobs Creation Act,” introduced by Reps. Ed Royce, R-Calif., and Carolyn McCarthy, D-N.Y., to raise the current MBL limit for qualified credit unions from 12.25 percent of total assets to 27.5 percent. It is also working to support a similar Senate bill, S. 968, the “Small Business Lending Enhancement Act,” introduced by Sen. Mark Udall, D-Colo.
Treasury Department blog