Bank executives say they're using TARP money as intended

Despite recent reports that Citigroup Inc. had sought to buy a $50 million corporate jet and Bank of America Corp. had planned a massive "Super Bowl Fun Fest," eight executives representing the largest recipients of TARP funds told Congress today that they were using the government money responsibly and expanding the credit supply as intended.

"We have not used any of the funds to pay dividends or compensation," said Robert P. Kelly, chairman and chief executive officer of Bank of New York Mellon Corp.

Bank of New York Mellon and the other banks whose executives testified Tuesday got $165 billion in bailout money through the Troubled Asset Relief Program.

"Since we received the capital investment under TARP on 1 October 2008, our lending volumes have been significant, particularly in light of the rapidly deteriorating economic environment," said James Dimon, chairman and CEO of JPMorgan Chase & Co.

"In the fourth quarter alone, we extended more than $115 billion in new credit to consumers and businesses," said Bank of America's Kenneth Lewis.

But according to Rep. Gary Ackerman (D-NY), very little of that was new lending when compared to levels from previous years.  "It seems to me and some of us that this money hasn't reached the street, that you haven't loaned it out," Ackerman said.

All of the bank executives agreed to detail their use of TARP funds in writing. A few took the opportunity during their opening remarks to announce that they were releasing public reports on their spending. (Citigroup's is here; Bank of America's is here.)

Ackerman's questioning also led to perhaps the most telling sign that the taxpayers may be disappointed in their recent investments: Only three of the eight executives said they had bought more shares in their companies in the previous six months.

BailoutSleuth will continue to monitor Congressional oversight of TARP and will follow up on the executives' promises to detail how they've spent their part of the $350 billion already distributed under the $700 billion program.