The Treasury Department announced today that it has injected $29.3 Million into 10 banks on Tuesday, which will be the last institutions to receive investments from the taxpayer funded program established last year to fortify the financial system.
At the height of the financial crisis during the fall of 2008, Congress adopted a $700 bailout program to provide capital to the nation’s financial institutions, in an effort to prevent a massive and widespread collapse. Although the program had many critics, its has proven to be useful and successful.
During this year, all of the major national banks have paid back those investments, with interest, to the taxpayers. The firms have paid back early, and the government has earned large profits on these investments. The program is now winding down its new investments, and those announced this week will likely be the last outlays of the program.
Although the order of these events may anger some, it is the proper order to ensure a functioning system. Had the banks collapsed, there would have been a deeper panic than we already observed – by shoring this up, the Treasury can now start working down the chain. Small business lending is critical to the economy, and as 2010 strategies are crafted at the banks, this seems to be a hot issue as we look towards an economic rebound and expansion. In addition, reversing the tide of foreclosures will serve to increase consumer confidence and act as a necessary seed to a recovery.
The banks receiving the latest outlay are: Atlantic Bancshares Inc. in South Carolina; Union Financial Corp. in New Mexico; Mainline Bancorp Inc., in Pennsylvania; FBHC Holding Co. in Colorado; Western Illinois Bancshares Inc. in Illinois; DeSoto County Bank in Mississippi; Lafayette Bancorp. Inc. in Mississippi; Private Bancorporation Inc. in Minnesota; CBB Bancorp in Georgia; and Illinois State Bancorp Inc. in Illinois. These smaller community banks will improve their capital positions, and prevent further devastation for the FDIC.
