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Inside Washington (01/27/2011)
* WASHINGTON (1/28/11)--The U.S. will record a profit of $312.2 million from the sale of 465.1 million warrants to purchase common shares of Citigroup Inc., the Treasury Department announced Wednesday (American Banker Jan.27). The sale of the warrants is the government’s remaining stake in Citi, which it obtained through the Troubled Asset Relief Program (TARP). Treasury invested a total of $45 billion in Citigroup through TARP. It has recovered all of the $45 billion plus about $12.2 billion in profits, consisting of dividends, interest and gains on the sale of Citigroup common stock, warrants and other securities. Last year Treasury sold its 34% share common stock investment in Citigroup. With the expected closings of the warrant offerings, Treasury’s remaining interest in Citigroup will consist only of trust preferred securities with a principal value of $800 million held by the Federal Deposit Insurance Corp. … * WASHINGTON (1/28/11)--The House Financial Services Committee’s first hearing of the year was dominated by criticism of the Dodd-Frank Act, policies of the Federal Reserve Board and the role of the government-sponsored enterprises in the financial crisis, and indication that panel’s direction will be as partisan as its predecessor (American Banker Jan.27). The committee’s vice chairman, Rep. Jeb Hensarling, (R-Texas), citing President Barack Obama’s State of the Union pledge to target burdensome regulations, said the Dodd-Frank Act was one such example. But Democrats disagreed, saying Republican were over-politicizing the issues before the committee. For example, Rep. Al Green (D-Texas) said Republicans were overstating the impact of Fannie Mae and Freddie Mac in the crisis with the objective of abolishing the government-sponsored enterprises, which the GOP has never supported. Credit Union National Association (CUNA) President/CEO Bill Cheney sent a letter ahead of Wednesday's hearing advising that the cap on credit union member business lending should be a key part of the economic recovery and job creation plans touted by the committee and other members of Congress (News Now Jan. 27). … * WASHINGTON (1/28/11)--Lawmakers were disappointed that President Barack Obama failed to address key banking issues in his State of the Union address on Tuesday (American Banker Jan.27). Most notably absent from the speech were the continuing foreclosure crisis and the future of the government-sponsored enterprises. Obama’s shift away from financial issues differed from his approach in the previous two years. In 2009, the financial crisis still cast a dark cloud over the economy. Last year, the president was pushing for financial reform. This year, with banks beginning to regain profits and the Dodd-Frank Act made into law. Obama mainly mentioned legislative accomplishments related to financial services. Questions still remain in the financial services sector. The administration’s Home Affordable Modification Program, which uses federal money to help troubled borrowers avoid foreclosure, has largely failed. And the administration has yet to offer a proposal on the future of Fannie Mae and Freddie Mac, which are still being run by the government …


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