The Obama administration has begun monitoring the high-level board meetings of nearly 20 banks that received emergency taxpayer assistance but repeatedly failed to pay the required dividends, according to Treasury Department officials and documents. And it may soon install new directors on some of their boards.
The moves come as the number of banks that failed to make at least one dividend payment to the government rose to 132 in the last quarter. These “deadbeats,” as they are sometimes called, are virtually all community lenders and collectively received billions of dollars in taxpayer assistance.
In addition to those firms, seven others have failed, resulting in the total loss of the government’s investment.
The number of banks that have missed six or more dividend payments has reached 19, up from seven during the previous quarter. Under the government’s agreement with those firms, the Treasury now has the right to monitor their boards and appoint new members.So much for the Barack Obama who said last April, “I don’t want to run auto companies, and I don’t want to run banks.” (To properly understand Obama, you must replace “don’t” with “desperately.”) He may insist he does not want to engage in this behavior — and he repeats it again, and again, and again.
The story goes on to reveal “a fifth of banks in the program, almost all of them small community lenders, are not paying the government dividends on time,” meaning they too are en route to an Obama-appointed bank board. The Wall Street Journal reported Sunday that as many as 98 bailed-out banks, which received $4.2 billion in TARP funds, are in danger of failing based on an analysis of their third quarter earnings results.
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