WASHINGTON (9/25/13)--More than 113 small- and mid-sized banks that received taxpayer funds through the U.S. Treasury's Troubled Asset Relief Program (TARP) are still on the hook for $2.7 billion in borrowed government money, the Wall Street Journal reported this week.
This debt is creating issues for the Treasury, which is looking to offload the stakes it took up in these small institutions. According to the Treasury, 79 of these banks are behind on their payments to the government, and 63 of those banks have missed 10 payments or more. In some cases, troubled banks are filing for bankruptcy, a move that wipes out any taxpayer-held equity when they fold.
As many banks continue to hold out on repaying their debts, and lending to their small business-owning customers, credit unions, which received no TARP funding, continue to advocate for measures that would help them increase their lending activities in surrounding communities.
Separate House (H.R. 688) and Senate (S. 968) member business lending (MBL) bills were introduced earlier this year. Both bills would increase the MBL cap from 12.25% of assets to 27.5%. The Credit Union National Association has estimated that lifting the MBL cap would create 140,000 jobs and inject $13 billion in new funds into the economy, at no cost to taxpayers. Both bills enjoy bipartisan support.
H.R. 688 has 115 House co-sponsors, and S. 968 is co-sponsored by 17 senators.