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Republican Plan To End The Bailout Of Fannie Mae and Freddie Mac View the plan here |
4-2-09, Bachus Introduces Bill to Prevent TARP Banks From Swapping Toxic Assets For Profit at Taxpayer Expense |
April 2, 2009
Congressman Spencer Bachus (AL), the top Financial Services Committee Republican, issued this statement regarding legislation he introduced to prevent TARP recipients from gaming the Public-Private Investment Program: Business Week reported that under Geithner's toxic assets bailout scheme, "A bank could effectively swap its existing portfolio of junky loans for another one very similar-only this time limiting the downside by using government loans and guarantees. The bank would auction off its loans to a public-private partnership. Then, using a portion of the auction proceeds, it would set up a different public-private partnership that would of course have access to government loan guarantees and matching funds. The bank would use the new partnership to buy a portfolio of similar problem assets twice the size of its old portfolio. The bank would then split any gains from the new portfolio 50-50 with the feds-but risk no more than the sliver of equity it contributed to the deal." |