Treasury Doles Out More TARP Money; Upgrades Countrywide Funding Cap
June 16 2009 - 4:00PM
Dow Jones News
The U.S. Treasury Department has doled out an additional $39.1
million in funds to seven new banks, including Berkshire Bancorp,
Inc. (BERK), First Financial Bankshares Inc. (FFIN), Enterprise
Financial Services Corp. (EFSC) and River Valley Bancorp
(RIVR).
Other banks that recently received Troubled Asset Relief Fund
capital injections from Treasury include SouthFirst Bancshares Inc.
(SZBI), Virginia Company Bank (VGNA) and First Vernon Bancshares
Inc.
In addition, Treasury said it would increase by $3.3 billion the
maximum amount it will provide to Countrywide Home Loans Servicing.
Initially, Treasury reported a $1.9 billion cap in incentive
payments to Countrywide. But the cap can be adjusted.
The names of the banks were announced in a transaction report
Treasury made public Tuesday.
The government delivered the funds to the banks on June 12 in
exchange for shares in the companies, all part of a broader federal
effort to inject capital into banks around the country and revive
lending.
The report shows that Treasury has so far spent a total of
$197.6 billion under the bank capital program which was launched in
October.
The specific amount of aid Countrywide will receive is
contingent on Countrywide helping borrowers modify and refinance
their mortgages as required under the administration's new home
loan modification program. The goal is to provide aid to servicers
who agree to rework loans for troubled borrowers or borrowers who
owe more on their mortgages than their homes are worth.
New so-called incentive payment caps were also announced for
several other servicers, including for Bank of America Corp. (BAC),
which received a $5.5 million boost in its cap, according to the
report. Initially, Treasury reported a cap of $798.9 million for
Bank of America.
-By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255,
maya.jackson-randall@dowjones.com