Deadbeat Banks Fail to Pay TARP Dividends

By: Zachary Pienkowski

NEW YORK (TheStreet) -- Thirty-three banks missed their August dividend payments to the Treasury Department for money granted through the Troubled Asset Relief Program, or TARP.

TARP began almost a year ago with some arm-twisting from the Treasury Secretary at the time, former Goldman Sachs Chief Executive Officer Henry Paulson. He told nine of the largest U.S. banks, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Morgan Stanley and Goldman Sachs, they had to accept billions of dollars in support from the government even if they didn't need it.

While many big banks have already repaid TARP in full, it's clear the banks that have deferred their dividend payments are still short of capital.

For the four largest companies missing TARP dividend payments, the total deferred was an estimated $41.6 million. The biggest bank was New York-based CIT Group, which is negotiating with creditors to avoid filing for bankruptcy. CIT received $2.3 billion in government money in December. The bank would represent the first significant loss to TARP.

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