Banks promise they won't use bailout money for pay - Cincinnati News, Weather, Sports from FOX19 NOW-WXIX

Banks promise they won't use bailout money for pay

WASHINGTON (AP) - Members of Congress complained Thursday that banks haven't used $163 billion infusion of capital, already received or promised by the government, to open credit lines for more lending.

"In these uncertain and difficult times, banks are inclined to hoard rather than to deploy capital," charged Sen. Charles Schumer, D-N.Y. Schumer said that when the Treasury Department comes back to Congress to release the final $350 billion installment of a $700 billion bailout rescue fund, he and colleagues want to require banks to do more lending.

Congress can block the release of the funds or impose conditions on how they are used but would have to rewrite the law.

Congress is looking at making banks show they have increased their lending in order to share in the $350 billion phase two part of the bailout plan. Lawmakers already were looking at rewriting a portion of the legislation next week, in a lame duck session, to let the beleaguered auto industry have a $25 billion share of the money.

Treasury has so far has devoted $250 billion of the bailout money to buying equity in banks and another $40 billion to insurance giant American International Group Inc. The hope was that the infusion of news capital would enable them to increase lending, but so far that hasn't happened, lawmakers said at a hearing by the Senate Finance Committee Thursday. Instead, some of the recipients of the money have continued to pay dividends to stockholders, provide pay raises and bonuses to executives and other employees and level takeover bids at other companies.

Lawmakers said they want to impose restrictions on all those activities for companies getting bailout money. Executives from four financial institutions that have received a total of $75 billion in federal bailout funds promised at the hearing that none of the aid would be used for paying executives and employees.

"The committee has asked whether (bailout) funds would be spent on executive compensation," said Jon Campbell, regional banking president for Wells Fargo & Co. in his testimony. "The answer is no. Wells Fargo doesn't need the government investment to pay for bonuses or compensation."

 Executives from Goldman Sachs Inc., Bank of America and JP Morgan Chase & Co. made similar pledges.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

  • FOX19 HeadlinesMore>>

  • Congressional leaders to review information on Russia probe

    Congressional leaders to review information on Russia probe

    Tuesday, May 22 2018 12:12 AM EDT2018-05-22 04:12:21 GMT
    Tuesday, May 22 2018 12:03 PM EDT2018-05-22 16:03:54 GMT
    (AP Photo/Carolyn Kaster, File). FILE - In this Thursday, May 17, 2018, file photo, U.S. President Donald Trump speaks during a meeting in the Cabinet Room of the White House, in Washington. Trump said he will "demand" that the Justice Department open ...(AP Photo/Carolyn Kaster, File). FILE - In this Thursday, May 17, 2018, file photo, U.S. President Donald Trump speaks during a meeting in the Cabinet Room of the White House, in Washington. Trump said he will "demand" that the Justice Department open ...

    The agreement came after President Donald Trump made an extraordinary demand that the Justice Department investigate whether the FBI infiltrated his presidential campaign.

    Full Story >

    The agreement came after President Donald Trump made an extraordinary demand that the Justice Department investigate whether the FBI infiltrated his presidential campaign.

    Full Story >
  • Mass school shootings mostly happening in small-town America

    Mass school shootings mostly happening in small-town America

    Tuesday, May 22 2018 12:34 AM EDT2018-05-22 04:34:14 GMT
    Tuesday, May 22 2018 11:56 AM EDT2018-05-22 15:56:16 GMT
    (AP Photo/David J. Phillip, File). FILE - In this Friday, May 18, 2018, file photo, mourners wait for the start of a prayer vigil following a deadly shooting at Santa Fe High School in Santa Fe, Texas. If you want to know where mass school shootings ar...(AP Photo/David J. Phillip, File). FILE - In this Friday, May 18, 2018, file photo, mourners wait for the start of a prayer vigil following a deadly shooting at Santa Fe High School in Santa Fe, Texas. If you want to know where mass school shootings ar...

    Look no farther than small-town and suburban America to know where mass school shootings are most likely to occur.

    Full Story >

    Look no farther than small-town and suburban America to know where mass school shootings are most likely to occur.

    Full Story >
  • The princes, the president and the fortune seekers

    The princes, the president and the fortune seekers

    Tuesday, May 22 2018 12:13 AM EDT2018-05-22 04:13:57 GMT
    Tuesday, May 22 2018 11:54 AM EDT2018-05-22 15:54:25 GMT
    (AP Photo/Evan Vucci, File). FILE - In this May 20, 2017, file photo, President Donald Trump shakes hands with Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman in Riyadh. In emails obtained by The Associated Press, George Nader claims...(AP Photo/Evan Vucci, File). FILE - In this May 20, 2017, file photo, President Donald Trump shakes hands with Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman in Riyadh. In emails obtained by The Associated Press, George Nader claims...

    A top Trump fundraiser and a senior adviser to a UAE crown prince ran a secretive campaign, trading lobbying against Qatar for defense contracts from Gulf countries.

    Full Story >

    A top Trump fundraiser and a senior adviser to a UAE crown prince ran a secretive campaign, trading lobbying against Qatar for defense contracts from Gulf countries.

    Full Story >
Powered by Frankly