The U.S. Senate defeated a bill that would have made it easier for recipients of bailout money to return it to the Treasury Department.
The bill was sponsored by Sen. David Vitter, a Republican from Louisiana, and failed by a vote of 53-39. It was introduced as an amendment to the banking regulation bill currently working its way through Congress.
The bill would have given banks that accepted funds under the Troubled Asset Relief Program the right to return it if they proved they were well-capitalized enough to survive without it.
It also would have removed the requirement that the banks "repurchase warrants owned by the federal government at market prices as a condition of the repayment," Dow Jones Newswire reported.
Since the TARP program began last year, an increasing number of financial institutions have changed their mind about participating, with some stepping back before accepting the money, and others attempting to return it as soon as possible.
Most banks have cited restrictions on executive pay and concerns about unpredictable regulatory policy as the reasons for wanting to withdraw.
Under current law, banks may apply to Treasury to return the money but are not guaranteed permission. Critics of the Vitter bill said that it contained overly broad language about the requirements to qualify as healthy, which might have made it too easy for banks to withdraw from the program.
A vote on the banking regulations bill is expected early next week.
The bill was sponsored by Sen. David Vitter, a Republican from Louisiana, and failed by a vote of 53-39. It was introduced as an amendment to the banking regulation bill currently working its way through Congress.
The bill would have given banks that accepted funds under the Troubled Asset Relief Program the right to return it if they proved they were well-capitalized enough to survive without it.
It also would have removed the requirement that the banks "repurchase warrants owned by the federal government at market prices as a condition of the repayment," Dow Jones Newswire reported.
Since the TARP program began last year, an increasing number of financial institutions have changed their mind about participating, with some stepping back before accepting the money, and others attempting to return it as soon as possible.
Most banks have cited restrictions on executive pay and concerns about unpredictable regulatory policy as the reasons for wanting to withdraw.
Under current law, banks may apply to Treasury to return the money but are not guaranteed permission. Critics of the Vitter bill said that it contained overly broad language about the requirements to qualify as healthy, which might have made it too easy for banks to withdraw from the program.
A vote on the banking regulations bill is expected early next week.
published May 5, 2009, 0 Comments
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