After taking billions of dollars of taxpayer money as part of the Troubled Asset Relief Program, Bank of America has now positioned itself to repay the money to the federal government as part of the agreement. However, Bank of America’s plans to repay the funds have been halted over a disagreement concerning how much additional capital the bank must raise to satisfy regulators.
The timing of the disagreement is difficult for the bank, as President Obama’s so-called “pay czar” has just set a variety of restrictions on executive compensation that has lowered compensation for the top employees of Bank of America …read more

Some of the nation’s small banks may end up with access to TARP.

According to the Congressional Oversight Panel in its monthly report, the TARP fund may need to infuse more capital into regional and other smaller banks in order to deal with troubled loans. The panel recommends that anywhere from $12 billion to $14 billion be siphoned off into smaller banks.
The committee was formed to oversee the Troubled Asset Relief Program, monitoring any changes that lawmakers may need to authorize in order to improve the program. So far, the COP has found that bigger banks have been able to cope well with troubled loans, recommending that the government instead focus on banks …read more

Credit card giant American Express has reported a $337 million profit in its second quarter, which marks a 48 percent decrease in profits from the same time last year, when the company earned $660 million in profits. American Express has blamed its relative underperformance on its move to pay off some of the money that it received from the government bailout.
 
According to American Express, the company’s profits, excluding the costs involved in paying back at least some of the money the company received as part of the TARP program, are actually three times higher than what they reported. Analyst predictions, …read more

Although it recently took $40 billion from the government in order to stay afloat, American International Group’s CEO Edward Liddy has expressed his confidence that AIG is on its way to quickly paying back its federal debt. AIG chalks this up to a sweeping decrease in risks in its derivatives business.
 
AIG has not released any sort of predictions regarding the value of its stock increasing or decreasing in the near future, much to its shareholders’ chagrin. However, Liddy has called AIG’s chances of repaying the government “excellent” and promises a changing business model in the coming months.
 
Liddy revealed his predictions …read more

Citigroup Inc. lost its most senior executive in Asia to MasterCard Inc. when Ajay Banga, 49, left his executive role at Citigroup to become next in line for the title of CEO of MasterCard. On August 31, MasterCard president and CEO Robert Selander will cede his president title to Banga, who will also serve as the chief operating officer.
 
MasterCard Worldwide debuted in 2006 and has done very well since its launch, with its stock more than quadrupling in value throughout the last three years. Banga leaves behind a troubled Citigroup, which recently took $45 billion from the U.S. government as …read more

OptionsHouse CEO, George Ruhana, today posted an open letter to U.S. Department of Treasury Secretary Timothy Geithner on his blog on the online brokerage’s Web site. Ruhana wrote the letter to highlight the shortcomings of the TARP warrant buyback process and propose real alternatives to help bolster the struggling U.S. economy and chip away at the national deficit.
From Ruhana’s blog post:
“The U.S. taxpayers backstopped the banks that accepted TARP money when no one else would and should be rewarded for stabilizing the system. However, rather than working to secure the best return for the American people by opening up the …read more

There will be four new faces at Bank of America’s board meetings: Federal Reserve Governor Susan Bies, former Compass Bancshares Inc. leader D. Paul Jones, former FDIC Chairman Donald Power, and retired  Bank One Corp. and Visa International Inc. executive William Boardman. These outside directors will bring their collective experience to the troubled financial giant.
The new additions follow the departure of Robert Tillmann, former Lowe’s Cos. Inc. chief executive, who resigned from the Bank of America board on May 29. According to the Securities and Exchange Commission, Tillman’s resignation had nothing to do with any conflicts with Bank of America or …read more

On Tuesday lawyers representing Sun Trust shareholders filed a class action charging that they did so pursuant based on a false and misleading registration statement and prospectus. The defendants are said to have sold 27.6 million units of the securities at $25 per share, for proceeds of over $690 million.
In November 2008, SunTrust received $3.5 billion in funds from the Troubled Asset Relief Program and an additional $1.4 billion in December 2008.
Then on January 22, 2009, when SunTrust released its earnings for the fourth quarter of 2008, SunTrust reported its first quarterly loss in at least two decades, cut its …read more

According to a report by the U.S. Treasury Department, the banks that received billions of dollars of taxpayer money from the TARP fund have actually been less forthcoming with credit than before. The report shows that the total amount of all outstanding loans from the banks that received taxpayer money has fallen 0.8 percent in a month’s time.
 
This means that the total amount of money involved in lending contracts has shrunk from $5.28 trillion to $5.24 trillion from February to March in the 500 financial institutions that received taxpayer money. Commercial loans have fallen 1.2 percent $2.35 trillion in everywhere …read more