By John Stang
All told, including dividend, interest and other payments, U.S. banks have repaid the government $211.5 billion under the Capital Purchase Program (CPP), the first phase of the government’s Troubled Asset Relief Program (TARP), according to a report Thursday by the Government Accountability Office, a congressional watchdog. That’s more than the $204.9 billion the banks initially got under TARP.
Where did it come from? An initiative called the small business loan fund, another TARP program. Suzy Khimm explains:
The Small Business Loan Fund was part of legislation that passed in September 2010; it closed a year later. Some deemed it to be a flop for having failed to disperse most of its funds, so it was an obvious choice for qualifying TARP banks who still need government loans. But like the original TARP, the Small Business Loan Fund–dubbed “TARP 2.0” by its opponents–wasn’t paid for up front, so its ultimate fiscal impact will depend on if and when banks finally pay their loans back.
Although, at least they’re looking out for you…right?:
Tim Massad, Treasury’s assistant secretary for financial stability, said Treasury expects to receive a positive return of more than $20 billion on the program. “We will continue to work to wind down the program in a way that ensures financial stability and protects the interest of taxpayers,” Massad said in a letter to the GAO.
We’ll see about that prediction