US Treasury Recognizes $2.3 Billion TARP Loss From CIT Group; PNC Repays $7.6 Billion
February 10 2010 - 5:00PM
Dow Jones News
U.S. taxpayers' $2.3 billion stake in CIT Group Inc. (CIT) has
officially been wiped out.
The U.S. Treasury recognized the loss, which was widely
expected, in a report released Wednesday despite a government
shutdown caused by the area's second severe winter storm in a
week.
The Treasury provided the commercial lender with funds from the
Troubled Asset Relief Program in December 2008, but CIT Group still
ended up undergoing a bankruptcy reorganization by the end of
2009.
Despite the CIT Group loss and other likely taxpayer losses, the
Treasury expects the cost of TARP will continue to fall from the
just under $120 billion at which it now stands.
The Treasury is expecting its losses on financial sector rescue
efforts to largely stem from aid provided to domestic automakers,
American International Group (AIG) and government sponsored
enterprises Fannie Mae (FNM) and Freddie Mac (FRE).
"If Congress joins the President in adopting a Financial Crisis
Responsibility Fee, Americans will not have to pay one cent for
TARP," Treasury Secretary Timothy Geithner said in a statement
released separately Wednesday.
Treasury is expecting to turn a profit on aid provided directly
to the banking sector and on Wednesday said it had received a $7.6
billion TARP repayment from PNC Bank (PNC). Including the PNC
transaction, banks have so far repaid $173 billion in capital
borrowed from the Treasury.
-By Meena Thiruvengadam, Dow Jones Newswires; 202-862-6629;
meena.thiruvengadam@dowjones.com
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