Banking Law

One of the most popular games in Washington, D.C. these days is poking fingers in the eyes of big banks to show "The Peeps" what a populist can do to a rootless cosmopolitan capitalist oppressor of the working man (and womyn). In that vein, the US Treasury Department today crowed about how it drove a hard bargain with the big banks who repaid TARP CPP money on the purchase price of the warrants those banks bought back.

The Obama administration said Wednesday it's increased the investment return to taxpayers by pushing banks to pay higher prices to repurchase stock warrants given to the government during the financial crisis.

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The Treasury said the $2.9 billion it received in the repurchase transactions exceeded estimates it and others had made. Those estimates had put the value of the warrants at between $2.6 billion and $2.7 billion. Treasury said the initial bids from the banks, which it rejected, totaled $1.7 billion on this group of warrants.

"This report makes clear that Treasury's process for selling these warrants has been consistent, transparent and has delivered strong returns for taxpayers," Herb Allison, the head of Treasury's financial rescue program, said in a statement.

What Treasury didn't crow about was the fact that if the federal government hadn't engaged in bad faith after-the-fact changing of the CPP terms, the banks might not have paid back the CPP funds yet and those warrants would be increasing in value instead of being converted into cash which may very well be flushed down those TARP rat holes called "General Motors," "AIG," Freddie Mac," and "Fannie Mae," entities which will be paying back the money invested in them by the US Treasury when Porky flies over the White House and does a victory roll. But hey, that's just my take on the matter and as every reader of this blog knows, I'm just another bourgeois exploiter of the proletariat, a lickspittle idler and a kulak parasite, a Bonapartist pig, a Trotskyite fascist hyena, a revanchist, and a class traitor, who deserves to be gulaged.

Also getting a lot less public yodeling by Secretary Geithner and his merry band of warrant regulators is a plaintive cry last week from the Conference of State Bank Supervisors for a continuing taste of TARP to be served up for community banks to dine upon. The CSBS wants Geithner to take some of that TARP money that's been repaid and institute a program for community banks that (a) permits banks to qualify for TARP CPP if they can show that they'll be viable after receiving the CPP injection (as opposed to the previous requirement that they must be viable without the CPP), and (b) establishes a "functional and attractive small business lending program" that community banks can use to make loans to those small businesses that drive the economy. Our inside sources tell us that Treasury Secretary Geithner was so impressed with CSBS CEO Neil Milner's request that he personally dialed him up and quoted this famous of line of Jack Handy's: "It take a big man to cry, but it takes a bigger man to laugh at that man."

Frankly, I think Mr. Milner would have made more headway if he'd sent the letter to Ariana Huffington.