I think the Congress, as a body, acted badly in the September/October bailout and needs self-criticism. I think Cleaver's comment deflects criticism away from Congress by playing one industry against another.
If it is true that Paulson forced many banks to accept the TARP money , and Congress (presumably including Cleaver) agreed to let Paulson do whatever he pleased with the money, I would think that those banks should not be criticized for not showing up to ask for money they did not ask for.
While I suspect that there were some investment banks sounding an alarm to Paulson about their own emergency needs and if so I see it as having been the responsibility of congress to have them show up along with Paulson, but they apparently chose to not do so.
The auto companies made a direct , clearcut request for taxpayer money and reasonably went in person to make their case.
There seem to be many reports about banks receiving money they did not want as well as some taking money because it was offered.
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http://www.tokoni.com/story/8196/paulson-forced-banks-to-take-tarp-money--from-san-francisco.html>
Russell Colombo, president and chief executive at Bank of Marin, which accepted $28 million in TARP money, agrees. "It's not like every bank has a huge lineup of customers wanting to borrow money. You have to underwrite them properly," he says.
Bank of Marin, which serves consumers and businesses in San Francisco, Marin and Sonoma counties, has been holding public meetings to explain "the purposes of the TARP money, why we took it and what we are doing with it," Colombo says.
One notion he wants to dispel is that taking TARP money means you're troubled.
When Congress approved $700 billion for TARP, it was supposed to buy troubled mortgage securities from banks. But the bill's language was broad, and former Treasury Secretary Henry Paulson decided in October he would use $250 billion to buy preferred stock in banks to bolster their capital.
In late October, Paulson forced the nation's nine largest banks to accept a total of $125 billion, regardless of their health. San Francisco's Wells Fargo got $25 billion in that first round. Citigroup and Bank of America later came back for billions more.
Paulson allocated another $125 billion to buy stakes in the nation's remaining 8,000-plus banks. To get these funds, banks were supposed to be financially strong, but Treasury never disclosed how it would determine a bank's health.
To date, Treasury has bought $193 billion in preferred stock from more than 200 banks, including the original nine. These shares pay a 5 percent annual dividend the first five years and 9 percent thereafter. The banks can buy the stock back from Treasury after three years.
"It provided very inexpensive capital," Colombo says.
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