Washington , DC – House Financial Services Committee Chairman Barney Frank today sent the following letter to members of the House Financial Services Committee regarding TARP repayments. Below is the text of the letter:
June 9, 2009
To: Members, Financial Services Committee
From: Barney Frank, Chairman
Today the Treasury announced that 10 of the largest financial institutions participating in the Capital Purchase Program (CPP) will be allowed to repay the $68 billion investment made by American taxpayers. That is good news on three fronts. First, it means the program is working and has begun to help restore stability to our vital financial system. Second, it means that the government will have additional resources to address continuing needs without having to ask taxpayers for more money or increasing borrowing. And, third, it means that that the taxpayer protections and compensation restrictions that Congress insisted be included in the original legislation are having the intended effect – taxpayers are participating in the upside as these institutions recover and raise additional private capital in order to exit the government program.
In sum, today’s announcement means that over one third – approximately $70 billion – of the $199 invested through the CPP has been, or will soon, be repaid. In addition CPP recipients have already paid an additional $4.5 in preferred stock dividends during the past seven months. That means that almost $75 billion has already been earned or repaid. Further those who repay have the right to repurchase the warrants held by Treasury at current market value – further increasing the return to taxpayers.