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Banking, finance, and taxes

Large Numbers Of TARP Recipients Skip Dividend Payments

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By Douglas A. McIntyre Updated Published
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Almost all the very large financial firms that got TARP money have repaid it with Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) getting their money back to the Treasury just as the year ends. The TARP is considered a success by most analysts because it kept the financial system from collapse in late 2008 and 2009. A great deal of the capital that was at risk has been returned to the taxpayers.

But, fifty-five banks did not make TARP dividend payments in November, according to data given to Reuters by bank research firm SNL

The research shows these 55  firms took $5 billion in TARP capital was only, so the risk of default should not compromise the overall success of the program.

What the data does show is that a number of US banks are still teetering on the edge of insolvency. The FDIC and state bank agencies have closed 140 banks this year. The FDIC  said in September that it was out of money and took in $45 billion by getting the banks for which it insures deposits to make early payments on their obligations to the agency. That sum will not be enough if the number of banks not making their TARP dividend payments is any indication.

The crisis might be over for the country’s largest banks, but in the rest of the industry there are still pockets of major weakness.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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