Treasury Gives $386 Million TARP Funds to 23 BanksThe Treasury announced on Tuesday that is was investing $386 million in 23 banks as part of its Capital Purchase Program, under the Troubled Asset Relief Program (TARP) to help increase money banks can lend to businesses and consumers.
With the added money, the Treasury says banks are better able to meet the lending needs of their customers, and businesses have greater access to the credit that they need to keep operating and growing.
Since it began in October 2008, Treasury has given 317 regional, small and large financial institutions and Community Development Financial Institutions $194.2 billion. Up to now the largest CPP investment was $25 billion and the smallest investment was approximately $1 million.
Among the most recent banks to receive Treasury funding through the CPP is the United Labor Bank, which provides cash management services to unions, multi-family lending and small commercial real estate loans throughout California.
Institutions that participate in the CPP must comply with restrictions on executive compensation during the period that Treasury holds equity issued through the CPP and agree to limitations on dividends and stock repurchases. Banks that take CPP money will pay the Treasury a 5 percent dividend on senior preferred shares for the first five years following the investment and a rate of 9 percent per year thereafter. Banks may repay Treasury under the conditions established in the purchase agreements, and Treasury may sell these shares when market conditions stabilize. For a complete list of the 23 banks and the amount they received see Treasury's announcement.
Bleak Consumer Mood on Economy
How Americans are viewing the current state of the economy has hit a new low, as people are pessimistic about their jobs and how quickly the economy will rebound out of the recession, says a private research group.
The Conference Board's Consumer Confidence Index fell to a new low of 37.7, from a revised 38.6 in December, even lower than the expected 39 by economists. The index has hit its lowest levels since it began in 1967 and is less than half of its level of 87.7 from January 2007.
Economists examine consumer confidence as a key sign of the economy, as consumer spending drives more than 65 percent of economic activity. These signs of a nervous consumer trigger new worries about the state of the retail industry that is already struggling through one of its worst periods in 30 years.
The Consumer Confidence survey samples 5,000 U.S. households and shows that consumers are still pessimistic about current conditions. Responses saying business conditions are bad increased to 47.9 percent and consumers who say they are good dropped to 6.4 percent from 7.7 in the previous survey.