Treasury Collects $2.5B In Bank Dividends

The U.S. Treasury said on Friday that American taxpayers have already begun to get back some of the money that they've invested to bailout the nation's banks. The Treasury has collected $2.52 billion in quarterly dividend payments from the capital injections it has made in financial institutions over the last six months.
The federal Capital Purchase Program (CAP) was launched in October to help stabilize the banking sector in the midst of the nation's intensifying recession. The Treasury - and taxpayers - received preferred shares for their cash injections, which pay dividends at an annual rate of 5 percent, increasing to 9 percent after five years.
According to a _""Reuters"":http://www.reuters.com _report, Treasury Secretary Timothy Geithner said in a letter to lawmakers that his office would begin publishing the dividend data on a monthly basis ""so the American people can see and evaluate the dividend income they are receiving from these investments.""
So far, the Treasury has provided aid to 547 institutions, ranging from the nation's largest lenders to smaller community-based banks, and it is planning to spread its investments to an even broader scope of companies. The Department recently released guidelines for both mutual banks and mutual holding companies to apply for federal funding.
_""Bloomberg News"":http://www.bloomberg.com_ reported on Friday that even after banks regain their footing and buy back the Treasury's preferred stock, ""the Treasury intends to retain an ownership interest in many U.S. banks.""
A Treasury official speaking on condition of anonymity, told _Bloomberg _that the government will retain warrants, attached to every capital injection it has made, even after any share buybacks. The warrants give the holder the right to buy additional stock in the future at a preset price, and according to _Bloomberg_, they may represent the latest complication in the government's $700 billion effort to unfreeze credit.
Diane Casey-Landry, COO of the ""American Bankers Association"":http://www.aba.com, told _Bloomberg_, ""When this program was created, everything was done so fast, I don’t think people were contemplating they would be exiting this quickly.""
But banks are looking for an early out. ""Earlier this month"":http://dsnews.comindex.php/home/news_story/2818, four regional community banks became the first institutions to pay back their bailout money. And larger lenders, including Goldman Sachs, J.P. Morgan Chase, Wells Fargo, and Bank of America, have not been shy about their intentions to quickly repay federal funds, citing stringent conditions now attached to the federal recovery plan as their rationale.
For these major institutions, however, they'll have to hold over any plans for repayment until after the government concludes its stress tests on the nation's top 19 banks. The Federal Reserve announced on Thursday that the results, which should establish which institutions can weather the economic storm, are expected to be released May 4.