The Treasury Department reportedly plans to curtail two Troubled Relief Asset Programs (TARP) originally intended to help consumer and small-business lending.
Treasury officials told The Wall Street Journal that they will close a $30 billion program that was intended to increase lending to small businesses but was never used as well as reduce the amount of money available for the Fed's little-used Term Asset-Backed Lending Facility, which offered financing for consumer and business loans.
"What we're really doing here is shifting from achieving financial stability through TARP to achieving it through regulatory reform and all the capacities now created through this legislation to deal with the crisis," said Herb Allison, Treasury's assistant secretary for Financial Stability.
The cuts, which Treasury says will have little impact because neither lending program was used much, are a result of the recently passed financial overhaul legislation.
The Congressional Budget Office estimates the cuts will save $11 billion of the $60.5 billion that must be cut in order to reduce TARP’s new spending limit to $475 billion.
The Wall Street bailout may be winding down, but that doesn't mean the government's support for big banks and the economy at large is over. In fact, the top cop on the bailout beat says it's just the opposite.
According to CNN Money, TARP special inspector general Neil Barofsky says government support for financial institutions and the still-distressed housing market is up 23 percent this year, moving to $3.7 trillion from $3 trillion last year.
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