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Inside Washington (03/16/2009)
* WASHINGTON (3/17/09)--President Barack Obama Monday ordered Treasury Secretary Timothy F. Geithner to "pursue every single legal angle" to block the ailing American International Group (A.I.G.) from paying its executives $165 million in bonuses after receiving substantial bailouts from the Treasury. "Under these circumstances, it's hard to understand how derivative traders like A.I.G. warranted any bonuses at all, much less $165 million in extra pay," Obama said, calling it an "outrage to the taxpayers who are keeping the company afloat." The administration is concerned a possible backlash against banks and Wall Street could be directed not only at financial institutions but also Congress and the White House, which could complicate the administration's efforts to win congressional approval of additional bailout packages (The New York Times March 16) … * WASHINGTON (3/17/09)--During an appearance Monday on the NBC "Today" program, House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) blasted American International Group's plan to pay $165 million in bonuses after it had received $173 billion in government bailouts. "The federal government is now 80% owner (of AIG)," Frank said, noting that bonuses "are going to people who screwed this thing up enormously… Since the federal government … now essentially owns that company, maybe it's time to fire some people," Frank said (Reuters and The Caucus Blog of The New York Times March 16) … * WASHINGTON (3/17/09)--The Federal Deposit Insurance Corp. (FDIC) is scrutinizing Community Reinvestment Act (CRA) compliance requirements more closely, say analysts. On March 5, FDIC announced five subpar CRA ratings. Three banks were told they need to improve. They were Salt Lake City-based CIT Bank, which was cited for buying $3.1 billion in subprime loans with predatory characteristics; Louisville-based Republic Bank and Trust Co., cited for tax refund anticipation loan violations; and Advanta Bank Corp., for "unfair and deceptive practices" in a cash-back award program. Analysts say this is a new precedent--that buying a product deemed predatory can adversely affect the CRA rating. Luke Brown, associate director of compliance policy at FDIC, said it is not drastically changing policy but added the current economic environment has led regulators to look more closely at compliance (Financial Planning.com and American Banker March 16) … * WASHINGTON (3/17/09)--The New York Federal Reserve Bank will begin accepting applications Tuesday for the first batch of loans under the Term Asset-Backed Securities Loan Facility (TALF), a program that loans to investors to provide liquidity for consumer lending. Investors planning to apply for TALF funds will have two extra days to apply for the funds, instead of just one day--today--the bank said Friday. Investors can now apply through 5 p.m. EDT Thursday. The Fed said in a press release it extended the application time at the request of potential borrowers who needed more time to collect documentation required for the application. Funds will be distributed on March 25, it said …


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