Community banks hanging onto TARP money

October 13, 2010

Community banks hanging onto TARP money

"Hundreds" of community banks are holding onto funds they have received through the Troubled Assets Relief Program since it began providing assistance in late 2008, The Washington Post reported Thursday.

The report says that more than 10 percent of these 700 institutions also have yet to pay the quarterly dividend to Treasury required by the program. It says there are 82 "delinquent" banks on this list and that the list has grown from 55 in November.

The story attributes this information to an analysis by Linus Wilson, a finance professor at the University of Louisiana at LaFayette. "Wilson calculated that the missed payments totaled $78.1 million in February and that banks now have missed a total of $205 million in dividend payments to the government," the story says.

The story adds that many of the community banks still holding TARP money are dealing with losses from real estate development loans. By contrast, the nation's nine largest banks (which were fairly well required to accept TARP funds when the program opened) have repaid it, the story says.

The funds were provided in return for "warrants," which the government could sell back to the firms, or auction off, to generate revenue.

The report was published as Treasury is pressing Congress for authority to provide community banks capital assistance through TARP in hopes they will increase their lending to small businesses.

NAFCU is continuing to press Congress for a solution for small business lenders, and encourage job creation,that involves no taxpayer funds: Raise the credit union member business loan limit from 12.25 percent to 25 percent of credit union assets. Both H.R. 3380 and S. 2919 would implement that increase, and NAFCU is urging lawmakers to include it in this year's job creation legislation.

Related Resources

September 12, 2024

Complete NAFCU Credit Union Compliance Advertising Guide

Guides

June 26, 2024 Add to Calendar 2024-06-26 14:00:00 2024-06-26 14:00:00 Gallagher Executive Compensation and Benefits Survey About the Webinar The webinar will share trends in executive pay increases, annual bonuses, and nonqualified benefit plans. Learn how to use the data charts as well as make this data actionable in order to improve your retention strategy. You’ll hear directly from the survey project manager on how to maximize the data points to gain a competitive edge in the market. Key findings on: Total compensation by asset size Nonqualified benefit plans Bonus targets and metrics Prerequisites Demographics Board expenses Watch On-Demand Web NAFCU digital@nafcu.org America/New_York public

Gallagher Executive Compensation and Benefits Survey

preferred partner

Gallagher

Webinar

June 21, 2024 Add to Calendar 2024-06-21 09:00:00 2024-06-21 09:00:00 The Evolving Role of the CISO in Credit Unions Listen On: Key Takeaways: [01:30] Being able to properly implement risk management decisions, especially in the cyber age we live in, is incredibly important so CISOs have a lot of challenges here. [02:27] Having a leader who can really communicate cyber risks and understand how ready that institution is to deal with cyber events is incredibly important. [05:36] We need to be talking about risk openly. We need to be documenting and really understanding what remediating risk looks like and how you do that strategically. [16:38] Governance, risk, compliance, and adherence to regulatory controls are all being looked at much more closely. You are also seeing other technology that is coming into the fold directly responsible for helping CISOs navigate those waters. [18:28] The reaction from the governing bodies is directly related to the needs of the position. They’re trying to help make sure that we are positioned in a way that gets us the most possibility of success, maturing our postures and protecting the institutions. Web NAFCU digital@nafcu.org America/New_York public

Newsroom