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Banking and
Financial Institutions Law Update January 13, 2009
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Banking and
Financial Institutions Team Leaders
Jean M. Weipert
Team Members
William G.
Asimakis, Jr.
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UNDER THE "TARP"
TROUBLED ASSET RELIEF PROGRAM
THE UNCERTAIN
FUTURE OF TARP
At the request of President-Elect
Obama, President Bush on Monday asked Congress to make available the
remaining $350 billion in TARP funds for the next Administration.
According to the U.S. Treasury Department's Interim Assistant
Secretary for Financial Stability Neel Kashkari, the first $350
billion has been fully allocated. Of the $250 billion allocated
to the Capital Purchase Program Kashkari states that, as of today,
$189 billion has been invested by Treasury in 257 institutions in 42
states and Puerto Rico. Furthermore, Treasury has completed a
term sheet for S-corporations which, according to Kashkari, will be
available on the Treasury website on
Wednesday, January 14th.
Yet, as the Interim Assistant Secretary's
remarks today at the McDonough School of Business at
Georgetown demonstrate, the Bush Administration is clearly on the
defensive about how the TARP money, and more specifically, Capital
Purchase Program funds, have been utilized. An article published yesterday
on Bloomberg.com goes into more detail about the tension
between Congress, the Bush Administration and even the banking
industry as a result of the implementation of the Capital Purchase
Program.
Pursuant to the
TARP legislation, President Bush's request on Monday starts the clock
on a 15-day period during which Congress has the ability to block the
disbursement of additional TARP funds through the passage of a Joint
Resolution of Disapproval. If no such joint resolution is
passed during the 15-day time period, the remainder of the TARP funds
automatically will be available to the Obama administration. If
a joint resolution is passed, the then-President would have the
opportunity to veto the joint resolution, which in turn would be
subject to an override vote in Congress.
Clark Hill will
strive to keep you consistently updated and informed about the
Troubled Asset Relief Program and the government's evolving response
to the turmoil in our capital markets. Please click here to view
our previously distributed "Under the TARP" newsletters.
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To find out more
about Clark Hill and our Banking and Financial Institutions
Law Group, visit clarkhill.com
or call 800.949.3124
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