Elizabeth Warren says results of Geithner's focus on Main Street are not encouraging

[flpoljunkie]

(Geithner ignores this at the Democrats' peril. People are angry and the mid-terms are rapidly approaching.)

"TARP had focused in its early months on bailing out Wall Street," the Panel's chair Elizabeth Warren said during a Wednesday evening conference call with reporters. Late last year the Treasury Department announced a change. "And now said it was time to focus on Main Street. Now that Treasury has made small business a priority, how well is it doing?" she asked rhetorically. "The results are not encouraging," Warren answered.

According to her panel's report:

"The largest TARP program, the Capital Purchase Program (CPP), provided hundreds of billions of dollars in new capital to banks, but Treasury did not require recipients to use the money to improve credit access. In fact, after receiving the money, most recipients decreased their lending."

"The Term Asset-Backed Securities Loan Facility helped to restore liquidity to the securitized lending market, but because relatively few small business loans are securitized, the program had little impact on small business lending."

"The Public-Private Investment Partnership program remains in its early stages, it has not targeted and will likely not target the smaller financial institutions that often serve small businesses."

"Two programs, the Community Development Capital Initiative (CDCI) and the Small Business Administration Securities Purchase Program, are proceeding under Treasury‟s existing TARP authority, but their effects are likely to be limited. The CDCI will serve only a limited number of very small institutions, while the Securities Purchase Program would affect only loans guaranteed by the Small Business Administration, which make up a small percentage of the small business lending market."

And the proposed $30 billion fund, which first needs the approval of Congress, "may not be fully operational for some time. It could arrive too late to contribute meaningfully to economic recovery," the report notes. "Moreover, banks may shun the program for fear of being stigmatized by its association with the TARP, or they may wish to avoid taking on...liabilities at a time when their existing assets, such as commercial real estate, remain in jeopardy."

http://www.huffingtonpost.com/2010/05/13/federal-oversight-panel-s_n_574781.html