Report: Taxpayers still owed $133B from bailout
Thursday, January 26, 2012
WASHINGTON (AP) — Companies that were bailed out during the financial crisis still owe U.S. taxpayers nearly $133 billion. Treasury’s plans to recoup that money have been slowed by the volatile stock market and weakness among smaller banks.
Some of the money will never be recovered.
That’s the conclusion of the acting inspector general for the government’s financial bailout. Some bailout programs, like the effort to reduce home foreclosures, will last as late as 2017, the inspector general said. Those programs could cost an additional $50 billion or more.
Among the largest bailed-out companies, American International Group Inc. still owes taxpayers around $50 billion, General Motors Co. owes about $25 billion and Ally Financial Inc. about $12 billion.
The 371 banks that still owe money include Regions Financial Corp., which owes $3.5 billion; Zions Bancorporation, $1.4 billion; Synovus Financial Corp., $967.9 million; Popular Inc., $935 million; First Bancorp of San Juan, Puerto Rico, $400 million; and M&T Bank Corp., $381.5 million.
After the 2008 financial crisis, Congress authorized $700 billion for the bailout of financial companies and automakers, called the Troubled Asset Relief Program, or TARP. About $413 billion was lent. So far, the government has recovered about $318 billion, or about 77 percent of it.
“TARP is not over,” Christy Romero, the acting IG, said in a statement.
Treasury bailed out companies in the form of loans. It converted its loans to some of the biggest recipients into common shares in those companies. Those shares are now trading below Treasury’s break-even prices.
For Treasury to sell its stock in the largest recipients at the price where taxpayers would break even — $28.73 a share for AIG, $53.98 for GM — it could take years, the report says. AIG’s shares closed Wednesday at $25.31. GM ended at $24.92. Ally isn’t publicly traded.
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