Senate Majority Leader Malcolm A. Smith and Senator Brian X. Foley Announce Policy Initiative to Track Tarp Funds and Help Families Avoid Foreclosure
January 30, 2009
(New York, N.Y.) State Senate Majority Leader Malcolm A. Smith and Senate Banking Committee Chairman Brian X. Foley (D-Blue Point) today unveiled a significant policy initiative that will survey and track federal Troubled Asset Relief Program (TARP) funds, and develop a plan for how to maximize the benefits of these funds to stabilize communities and help families avoid foreclosure.
The distribution of TARP funds by the U.S. Treasury Department has come under fire recently as a number of banks and other recipients continue to engage in questionable expenditures and massive giveaways in the billions to executives.
“It is important that TARP funds be managed appropriately, timely, and that we see immediate results so that taxpayers have the confidence to know their dollars are being used wisely. We can’t let banks go on an unrestricted spending spree with our federal tax dollars while people lose their homes to foreclosure,” said Senator Smith. “That’s the idea behind Senator Foley’s initiative and I applaud him for his courage in tackling this concern head-on. Having worked closely with the State Banking Superintendent on foreclosure prevention, we look forward to sharing the results of our information gathering with the banking department and helping New Yorkers stay in their homes.”
“Long Island taxpayers deserve to know that every dollar that is used to protect and stabilize our communities is not being wasted and mismanaged,” said Senator Foley. “My committee is developing a plan that will provide concrete steps for state officials, state funded service programs and banks across the state for how to best use these funds to stem the tide of foreclosures and grow our economy.”
Along with a final plan for action, other key responsibilities that Senator Foley and the Senate Banking Committee are undertaking to ensure the success of this initiative are:
- Documenting the full amount of TARP funds received by New York banks; how those funds have been used so far; and the amount of local investment and lending by each institution.
- Examining and analyzing the foreclosure prevention activities of TARP-funded New York banks with a particular focus on high-foreclosure areas like Suffolk and Nassau Counties.
- Mapping New York state foreclosure-prevention programs, including legal assistance and financial counseling and determining how resources can be used most effectively and efficiently.
While communities throughout the state have been devastated by the home foreclosure crisis, Suffolk County has been hit particularly hard. In 2008, the county had the second highest number of foreclosures in the entire state—nearly 13% of all foreclosures in New York—or 6,324 homes in all.
“Banks should not be sitting on these funds while families are facing homelessness,” said Senator Craig Johnson (D-Port Washington). “Senator Foley deserves a great deal of credit for this initiative, because even though the scale of this problem is huge, he’s not backing down and understands the importance of these funds.”
Below is a chart of 10 NYSBD banks or their holding companies that have applied for and been approved for funding by the U.S. Treasury. These are all banks that are chartered and regulated by the New York State Banking Department.
Name of Bank - Amount of Money Received - Date Funded
- Goldman Sachs $10 billion October 28
- Bank of New York Mellon $3 billion October 28
- The parent of Banco Popular North America (Popular Inc.) $950 million December 5
- M & T Bank Corp. $600 million December 23
- The parent of Emigrant Bank (NY Private Bank & Trust) $267.3 million January 9
- The parent of First Niagara Commercial Bank (FNFG Inc.) $184 million November 21
- Signature Bank $120 million December 12
- The parent of Berkshire Municipal Bank (Berkshire Hills Bancorp.) $40 million December 19
- The parent of Five Star Bank (Financial Institutions Inc.) $37.5 million December 23
- The parent of State Bank of Long Island (State Bancorp. Inc.) $36.8 million December 5
Data provided by: New York State Banking Dept.
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Posted by News LI Editor · Filed Under Money
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One Response to “Senate Majority Leader Malcolm A. Smith and Senator Brian X. Foley Announce Policy Initiative to Track Tarp Funds and Help Families Avoid Foreclosure”
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Everyone is ignoring the 2 ton Elephant in the room. Maybe it is due to the cliche..”You only see what you know”. Let’s admit that the contributing factor to most of our problems was the consumer’s lack of financial understanding. He is like a “Boat without a Paddle” when it comes to financial decision-making. It can be argued that this was the primary cause of the Subprime Mortgage Crisis which precipitated the credit crunch and our current economic woes. Loan mods and bailouts will not work! The fact is that re-default will occur within 6-8 months.
Let’s finally address the real solution which requires developing a program of “Immediate and Specific Financial Guidance” to help the Borrower understand how to manage his financial affairs. This can and must be done, or we can expect to repeat these errors again and again. We need a more Financially Literate public in order to survive in this complex economic environment. It should be clear by now, that we are all in the same boat together. Our economy seems to be impacted by our individual financial decisions.
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- Posted by: Prof. Samuel D. Bornstein