CCH Financial Reform News Center

Grassley Seeks Information on GM Purchase of AmeriCredit Corp.

This story appeared in Bank Digest.

Senate Finance Committee Ranking Member Chuck Grassley, R-Iowa, has asked the Special Inspector General for the Troubled Asset Relief Program to look into General Motor’s purchase of the auto loan company AmeriCredit Corp., including whether the Treasury Dept. was involved in the acquisition. General Motors currently is 61-percent owned by the U.S. government as a result of TARP. In his letter to Neil Barofsky, Grassley said that if GM had the funds to buy the lender it should instead have used the money to repay the TARP investment.

Bachus Cites SIGTARP Report Findings for Job Losses and Bailout Policies

This story appeared in Bank Digest.

Financial Services Committee Ranking Member Spencer Bachus, R-Ala., released a statement on the report issued by the Treasury Department's Special Inspector General for the Troubled Asset Relief Program (SIGTARP) regarding the relationship between job losses and President Obama's auto bailout policies. The report was released as the President called for further government spending to address the nation's staggering unemployment rate. Bachus stated, “It's a shame that a program designed to save jobs was so poorly executed that it cost tens of thousands of Americans their jobs and shuttered thousands of Main Street businesses, many of which had been institutions in their communities for generations.”

 

SIGTARP Reports on Auto Dealer Terminations

This story appeared in Bank Digest.

Following a request by Sen. Jay Rockefeller, D-W. Va., Chairman of the Senate Committee on Commerce. Science, and Transportation, and Rep. David Obey, D-Wis., Chairman of the House Appropriations Committee, the Office of the Special Inspector General for the Troubled Asset Relief Program has issued a report discussing the decisions of General Motors and Chrysler to reduce their dealership networks and the pace at which the automakers terminated the dealerships. The report addressed: the role of the Treasury’s Auto Team, which has the responsibility, among other things, of evaluating the companies’ restructuring plans and negotiating the terms of any further assistance, in the decision to reduce dealership networks; the extent to which GM and Chrysler developed and documented processes for deciding which dealerships to terminate and which to retain; and to what extent the dealership reductions are expected to lead to cost savings for GM and Chrysler.

Reconsideration of GM Executive Compensation Ruling Denied

This story appeared in Bank Digest.

The Special Master for TARP Executive Compensation has denied a request by General Motors to reconsider an April 16, 2010, determination regarding 2010 compensation for certain GM executive officers and highly compensated employees. GM had argued, in its reconsideration request, that a pending earnings report was relevant new information that was not previously considered and that it should be permitted to grant restricted stock units for the 2010 calendar year before the year has ended based on performance to-date and subject to continued performance for the remainder of 2010. In denying the reconsideration request, the Special Master noted that the pending earnings report did not present the type of new information that would support reconsideration. In addition, the earnings report did not contain a “material error” that must be remedied under the Treasury Department’s TARP compensation and corporate governance regulations.

Treasury Department Issues Cumulative Dividends Report

This story appeared in Bank Digest.

The Treasury Department has released its Cumulative Dividends Report as of May 31, 2010. The report covers the dividends paid by financial institutions that have received assistance from the federal government pursuant to such programs as the Capital Purchase Program, Systemically Significant Failing Institution Program or Automotive Industry Financing Program.

Grassley to Establish Facts Behind GM TARP Loan

This story appeared in Bank Digest.

Senator Chuck Grassley, R-Iowa, continues to question last week's claim that General Motors repayed its multi-billion dollar loan from the Troubled Asset Relief Program. Last week, Grassley asked the Treasury Secretary why the administration had allowed GM to use money from an escrow account at the Treasury Dept. to repay this loan, which he called “an elaborate TARP money shuffle.” In a floor speech April 28, Grassley said the response he received from the Treasury confirmed that taxpayers funded the loan repayment by way of cash that GM has because the federal government originally loaned that cash to GM, and then the federal government agreed to forgive some of GM's debt during bankruptcy in exchange for stock in the company, the value of which is uncertain.

Grassley Seeks Explanation of GM TARP Repayment Claim

This story appeared in Bank Digest.

Senator Chuck Grassley, R-Iowa, has charged that GM's recent repayment of TARP loans was made with other TARP funds and amounted only to “an elaborate TARP money shuffle.” He said his concern is based on recent testimony by Special Inspector General for TARP Neil Barofsky that the repayment was not coming from GM's earnings. Grassley has asked Treasury Secretary Tim Geithner to justify claims that GM has repaid the loans.

Information Sought on Fuel Standards and Auto Industry Aid Connection

This story appeared in Bank Digest.

House Oversight and Government Reform Committee Ranking Member Darrell Issa, R-Calif., and House Judiciary Committee Ranking Member Lamar Smith, R-Texas, have asked nine automobile industry chief executive officers for information on whether the government used the possibility of industry bailouts as leverage to obtain agreements on fuel economy standards. The congressmen are charging that the agreements resulted from “secret negotiations” between administration officials and industry participants.

Treasury Department Issues Cumulative Dividends Report

This story appeared in Bank Digest.

The Treasury Department has released its Cumulative Dividends, Interest and Distributions Report as of March 31, 2010. The report covers payments by financial institutions that have received assistance from the federal government pursuant to such programs as the Capital Purchase Program, Systemically Significant Failing Institution Program or Automotive Industry Financing Program.

COP Says Treasury's Decisions on GMAC Severely Constrained Its Options

By Serena Lynn, Editor, the CCH Federal Banking Law Reporter and Bank Digest.

The Congressional Oversight Panel has released its March oversight report, “The Unique Treatment of GMAC Under TARP.” The panel found that the government's early decisions to rescue GMAC instead of pursuing other options as part of a broader bailout of the domestic automotive industry resulted in missed opportunities to increase accountability and better protect taxpayers' money. The panel found that the Treasury and the Federal Reserve Board made critical decisions during the height of the financial crisis that severely constrained their options for addressing GMAC's uncertain future. According to the COP, GMAC's bailout dollars have also supported crippling losses in its mortgage lending business. The panel is deeply concerned that the Treasury has not required GMAC to lay out a clear path to viability or a strategy for fully repaying taxpayers.