Category — Troubled Asset Relief Program (TARP)

Financial Markets Regulatory Wire
January 27, 2010

Atlanta partner and head of the firm’s Office & Industrial Real Estate practice group Mark Elliott was quoted extensively in an online January 27 Financial Markets Regulatory Wire transcript of the committee hearing held at Georgia Tech by the Congressional Oversight Panel to Oversee the Troubled Asset Relief Program (TARP). [Read more →]

On February 10, 2010, the Congressional Oversight Panel released its much-anticipated report regarding “Commercial Real Estate Losses and the Risk to Financial Stability.” In the report, the Panel expressed its deep concerns that a wave of commercial real estate failures could threaten America’s already-weakened financial system and that “[c]ommercial loan losses could jeopardize the stability of many banks, particularly the nation’s mid-size and smaller banks.” [Read more →]

On February 2, 2010, President Obama announced a proposal (the Proposal) to establish a new Small Business Lending Fund (the SBLF) to encourage and facilitate increased lending by community banks to small businesses.  As proposed, the SBLF would offer up to $30 billion for equity investments in community banks, which are defined as banks with assets under $10 billion. The SBLF would be separate and distinct from the Treasury’s TARP program but would be funded with $30 billion of repaid TARP capital.  [Read more →]

On December 3, 2009, the Federal Deposit Insurance Corporation, the Federal Reserve, the Office of the Comptroller of the Currency and the Office of Thrift Supervision conducted a telephone seminar that provided additional guidance on the Policy Statement on Prudent Commercial Real Estate Loan Workouts, released on October 30, 2009 (Workout Guidance) and responded to questions submitted by financial institutions.  The regulatory agencies reiterated their intent to encourage prudent CRE loan workouts and reaffirmed that lenders will not be subject to criticism for prudently structuring CRE loan workouts, even if the new loans are impaired.  [Read more →]

Continuing his intense criticism of the Treasury Department’s management of the Toxic Assets Recovery Program (TARP) and other federal commitments under the 2008 Emergency Economic Stabilization Act (the Bailout), Neil Barofsky, Special Inspector General for TARP (SIGTARP), issued his second quarterly report on July 21, 2009, purporting to demonstrate, contrary to Treasury’s position, that TARP recipients can meaningfully describe how TARP funding has affected their lending and other operations. [Read more →]

Today, May 20, 2009, President Obama signed the Fraud Enforcement and Recovery Act, authorizing more than $280 million for federal fraud enforcement and specifically expanding the reach of federal fraud statutes.  With the powers now being aggressively exercised by the Special Inspector General for the Toxic Asset Recovery Program, and the mandate issued to the inspectors general of all funding agencies under the American Recovery and Reinvestment Act,  criminal, civil and administrative scrutiny of the use and accounting for all federal funding and private lending practices will be intense.  [Read more →]

The Treasury Department announced that the results of its comprehensive bank stress tests will be made available soon. The comprehensive stress tests and other traditional methods of evaluating bank performance are yielding results that some banks will find of critical importance in dealing with regulators, their customers and their shareholders. The public disclosure of this information by Treasury complicates matters. During this critical time, financial institutions in crisis need to focus on four key areas among the many challenges they face. [Read more →]

On April 24, 2009 President Obama signed an amendment to the Economic Stabilization Act of 2008 adding specific powers to those given in the Act to the Special Inspector General for the Toxic Asset Recovery Program (“SIGTARP”). [Read more →]

Created by the Economic Stabilization Act or 2008, the Special Inspector General for the Troubled Asset Recovery Program (“SIGTARP”) has the powers to audit and investigate TARP awards and to make recommendations to the Treasury Department on how it should manage TARP programs.  Acting with the attention of the Congress, oversight over Treasury, the authority to deal directly with TARP recipients, and the required cooperation of the Federal Reserve, the Securities and Exchange Commission and federal and state law enforcement, SIGTARP Neil Barofsky has a broad jurisdiction and extensive powers.  While his formal power of compulsion ends with court-enforced subpoenas and he must refer criminal matters for prosecution to the Department of Justice, in two months of activity, he has initiated 20 criminal investigations, audited the use of TARP funds and the executive compensation of its 364 recipients, and set a schedule of audits and investigations across the spectrum of TARP programs. [Read more →]

H.R. 1586
On March 19, 2009, the U.S. House of Representatives passed H.R. 1586 (Additional Tax on Bonuses Received from Certain TARP Recipients) by a vote of 328 to 93.  Generally, H.R. 1586 will impose a 90% personal income surtax on bonuses received by an employee or former employee of a “covered TARP recipient” with more than $250,000 in adjusted gross income ($125,000 for married individuals filing separately).  [Read more →]