Bailouts for smaller banks being considered
WASHINGTON - Treasury officials and regulators are weighing a fresh round of bailouts for banks that were deemed too risky to qualify for earlier aid.
Representatives from the Treasury Department, Federal Deposit Insurance Corp., and House Financial Services Committee discussed the plan by phone Thursday, said Dan Doyle, California Bankers Association chairman, who was on the call.
Small community banks are struggling as commercial real estate and other loans go sour. Officials and industry representatives are considering how to get money to those banks, Doyle said yesterday.
The new program could force Treasury to postpone closing its $700 billion bailout fund, which is scheduled to expire this year. That decision has become a political hot potato amid public backlash against bailouts and a rising deficit.
The money could go to banks whose ratings by regulators made them too weak to qualify for earlier rounds of funding. It may be limited to banks with less than $5 billion on their books. The banks could be required to raise matching money in the private markets, Doyle and others said.
