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Remember TARP? Turns out a pretty significant amount of those funds have yet to be repaid.
The biggest banks that received billions from the government’s taxpayer-funded bailout of the financial system—J.P. Morgan Chase, Bank of America—have long since bought back the preferred shares they sold to the Treasury Department in late 2008 and early 2009. Add in dividend payments and the sale of warrants, and taxpayers have notched a profit on the Capital Purchase Program, the central component of TARP. The CPP disbursed just over $250 billion to financial institutions and has received $264 billion in return. (The latest TARP update can be seen here.)
But the TARP did not just feed the whales of the American banking system. It also dished out chum to the minnows, in disbursements of tens or hundreds of million dollars to smaller, regional banks. All told, 707 financial institutions participated in the program. Of those, 325 have either made only partial payments or haven’t made any payments at all. Together, they owe the government more than $11 billion.
[Photo: David McNew / Getty Images]