Notebook > Money

Late payers

Money | A growing number of banks are missing their TARP deadlines

Issue: "Tilting at turbines," July 17, 2010

The U.S. Treasury issued a list of 91 banks that are behind in making quarterly payments to Uncle Sam. In 2008, the Treasury-trying to lubricate locked-up credit markets-purchased $205 billion in preferred stock in more than 700 banks under the controversial Troubled Asset Relief Program (TARP). Banks that received those cash infusions are supposed to make regular dividend payments to the Treasury Department, but an increasing number of them-mostly small, community institutions-don't have the money. The number of delinquent banks is up by 65 percent over 2009, Barron's reported. Almost one-fourth of the strugglers are in California.

At a June 22 Capitol Hill hearing, Treasury Secretary Timothy F. Geithner offered an upbeat assessment of TARP, set to expire in October. He told the Congressional Oversight Panel that the $700 billion program, which provided oodles of cash to carmakers and insurance companies in addition to banks, will likely end up costing only a "fraction" of the original amount.

TARP "has helped restore financial stability at a much lower cost than anticipated," Geithner told the panel, noting that banks had repaid about 75 percent of the money they received. The likelihood that GM and Chrysler will be able to repay their bailout money has improved, Geithner said, but he acknowledged that the government is likely to take a hefty loss (estimated at $35 billion) on its rescue of insurer AIG.

Battle in Britain

We see you’ve been enjoying the content on our exclusive member website. Ready to get unlimited access to all of WORLD’s member content?
Get your risk-free, 30-Day FREE Trial Membership right now.
(Don’t worry. It only takes a sec—and you don’t have to give us payment information right now.)

Get your risk-free, 30-Day FREE Trial Membership right now.

Attempting to tame a record peacetime deficit and calm nervous markets, Britain's six-week-old coalition government, led by Conservative Prime Minister David Cameron, unveiled an "emergency budget" that slashes spending for almost all government departments (with the notable exception of the National Health Service).

"We have examined, decided on, and in some cases halted the mass of unfunded commitments, IOUs, and overcommitted reserves that greeted us on entering office," said George Osborne, Chancellor of the Exchequer. "We've had to pay the bills of past irresponsibility."

The budget calls for increasing Britain's capital gains and value-added taxes ("Years of debt and spending make this unavoidable," Osborne said), while removing 900,000 of the nation's poorest from the tax rolls.

Labor Party leaders-booted from power in May's elections-called the plan "reckless."

Steady givers

A report on U.S. charitable giving, from the Giving USA Foundation and the Center on Philanthropy at Indiana University, found that while charitable contributions fell an estimated 3.6 percent during the economic tumult of 2009, giving by individuals did not decline at all, and giving to religious causes was down only slightly.

In raw numbers, individual giving (which accounts for 75 percent of all charitable donations) fell an estimated 0.4 percent last year, but when adjusted for 2009's slight deflation that wasn't a change from the previous year.

Giving to "Religion"-the largest giving category-fell by just 0.3 percent (adjusted for deflation). Actually, the report understates total religiously motivated giving. Some such giving (e.g., assistance to the poor) is included in the report's "Human Services" category, while donations to Christian schools fall under "Education."

Last year's sharpest giving declines occurred in charitable bequests (-23.9 percent), foundation grant-making (-8.9 percent), donations to foundations (-8 percent), and contributions to public-society benefit organizations such as the United Way (-4.6 percent).
Joseph Slife is the assistant editor of

Joseph Slife
Joseph Slife

Joseph is the senior producer of WORLD Radio and the co-host of The World and Everything in It.


You must be a WORLD member to post comments.

    Keep Reading


    Troubling ties

    Under the Clinton State Department, influence from big money…