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Summary Of the 707 banks that received taxpayer money from TARP, about half have repaid the U.S. Treasury.
Hundreds of bailed-out banksare still struggling to repay taxpayers and will soon find iteven harder to make required dividend payments to the U.S.Treasury, according to a report on Wednesday by the watchdogfor the government bailout program.Of the 707 banks that received taxpayer money from thegovernments Troubled Asset Relief Program starting in 2008,also known as TARP, about half have repaid the U.S. Treasury.However, 137 of those banks used a government-loan programto repay their taxpayer debts, according to the watchdogsquarterly report to Congress.And of the 325 banks still propped up with taxpayer money,203 have missed dividend or interest payments, with some missingas many as 13 payments since receiving capital injections at theheight of the financial crisis, said the report.Adding to their woes, the dividend that the bailed-out banksare required to pay to Treasury is set to increase to 9 percentfrom the current 5 percent as early as 2013.Those banks are not able to raise the capital that isrequired to get out of TARP, said Christy Romero, the specialinspector general for the bailout program.We are very concerned about those banks, and want thosebanks to stand on their own feet without government assistance,she said.Treasury has been trying to exit the bailout programs thathave been criticized by Republican lawmakers for excessivegovernment intervention. And Obama administration officialsrepeatedly stress that the bank bailouts, including the one usedto directly inject capital into banks, have earned taxpayersmore than $19 billion.This week, the Treasury said it would sell preferred stockand debt in 12 of the bailed-out banks. In June, Treasurysuccessfully raised some $200 million from the sale of preferredstock in seven bailed-out banks.Treasury has been careful in saying that it will exitprograms when the time is right and would not make decisions forpolitical reasons.Were continuing to balance exiting our investments as soonas practicable and maximizing value for taxpayers, saidTreasury spokesman Matt Anderson.But Romero said it appears Treasury wants to exit theirinvestments as soon as possible.If they want to do a swift government exit, (Treasury) hasto ensure that financial stability continues otherwise thepurpose of TARP is not met, Romero said, adding that she hasnot seen the analysis from Treasury that she thinks is necessaryto make decisions on whether to exit a TARP bank.According to the inspector generals report, taxpayers havenow lost $5.5 billion on its investment in insurer AmericanInternational Group. The governments remaininginvestment in the company is $30 billion, down from the initial$180 billion.
