11-21-2017  11:07 pm      •     
MLK Breakfast
  • 1
  • 2
  • 3
  • 4

NEWS BRIEFS

Kenton Library Hosts African American Genealogy Event Dec. 2

Stephen Hanks to present on genealogy resources and methods ...

PSU Hires New Police Chief

Donnell Tanksley brings policing philosophy rooted in community engagement to PSU ...

African American Portraits Exhibit at PAM Ends Dec. 29

Towards the end of its six month run, exhibit conveys the Black experience, late 1800s - 1990s ...

SEI, Sunshine Division Offer Thanksgiving Meals to Families in Need

Turkeys are being provided to fill 200 Thanksgiving food boxes for SEI families ...

NAACP Portland Monthly Meeting Nov. 18

Monthly general membership meeting takes place on Saturday, 12 - 2 p.m. ...

U.S. & WORLD NEWS

OPINION

Local Author Visits North Portland Library

Renee Watson teaches students and educators about the power of writing ...

Is the FBI’s New Focus on “Black Identity Extremists” the New COINTELPRO?

Rep. Cedric L. Richmond (D-La.) talks about the FBI’s misguided report on “Black Identity Extremism” and negative Facebook ads. ...

ACA Enrollment Surging, Even Though It Ends Dec. 15

NNPA contributing writer Cash Michaels writes about enrollment efforts ...

Blacks Often Pay Higher Fees for Car Purchases than Whites

Charlene Crowell explains why Black consumers often pay higher fees than White consumers, because of “add-on” products. ...

AFRICAN AMERICANS IN THE NEWS

ENTERTAINMENT

Jose Pagliery CNN Money

NEW YORK (CNNMoney) -- An Obama administration program is under fire, with federal investigators finding that community banks used the government's funds to pay back recession-era bailouts -- instead of lending the money to small businesses as originally intended.

The watchdog report released Tuesday found that $2.1 billion of the administration's $4 billion Small Business Lending Fund went to repaying bailouts. Many community banks were bailed out by the government in 2008 and 2009 under the Troubled Asset Relief Fund, or TARP, as it was commonly known.

CNNMoney has previously noted that the small business fund had failed to take off -- disbursing only $4 billion of the $30 billion it had originally carved out. The fund was established in 2011 to funnel cash to small firms, who were facing a borrowing crunch.

A significant number of banks used the small business lending program "to exit TARP using government funds... with little resulting benefit for small businesses," according to the report's author, Christy Romero, special inspector general for the Troubled Asset Relief Program.

The program's funds were cheaper -- with annual dividends of 1% for the first four years -- compared to the 5% to 9% for the TARP funds. To get the low rate, all a bank had to do was show a sufficient increase in its small business lending.

Romero found that the bailed out banks used 80% of the money to pay back TARP.

That's no surprise to Cliff McCauley, a banker in Texas who steered clear of both government programs.

"Everyone went in thinking it was one of the ways to pay back TARP," McCauley said. "It was disguised as promoting to encourage business lending."

McCauley, a senior executive vice president of Frost Bank in San Antonio, said the inspector's finding was inevitable. He said banks that had been bailed out were desperately looking for ways to pay back the expensive government bailout funds, especially at a time when the economy had just emerged from a recession and barely limping along.

About 332 banks and community lending groups took part in the small business lending program. Of those, 137 banks used those funds to pay back bailout money.

The Treasury Department said there's nothing wrong with the way the banks used the funds. In a memo last month, Deputy Assistant Secretary Don Graves pointed out that Congress intended that when it set up the fund.

Treasury also took issue with the report's findings that the program was ineffective, noting that 84% of TARP banks increased their small business lending. And their median lending increase was 18%.

However, Romero points out that the TARP banks received $2.7 billion in funds, and they increased small business lending by $3 billion -- or $1.13 for every dollar they received. What's more, 24 bailed-out banks in the program did not increase their small business lending at all.

Meanwhile, the non-TARP banks received $1.2 billion in funds and increased small business lending by $4.2 billion.

 

Oregon Lottery PM Home
Calendar

MLK breakfast 2018 300x100

Photo Gallery

Photos and slide shows of local events