Lewis’ arguments concerning TARP funds

Chief Executive Kenneth Lewis made statements before the Committee on Financial Services in Washington, D.C., regarding the federal government’s Troubled Asset Relief Program.

He started saying that Bank of America representatives understand the responsibilities that come with access to public funds as taxpayers want the bank to manage expenses carefully, and provide transparency about how it’s putting their money to work to restart the economy: these expectations are appropriate, and bank is working to meet them.

Then Lewis was speaking about managing BofA business to go forward by doing best to balance the interests of customers, shareholders, and taxpayers. But the fact is, it is in all interests that bank lends as much as it responsibly can – maximizing credit while minimizing future losses. Bank of America serves more than half of all U.S. households and millions of businesses: so the health and strength of the company depends on the health and strength of the U.S. economy. In the fourth quarter alone, Bank extended more than $115 billion in new credit to consumers and businesses.

Lewis told also that lending is how the bank earn returns for shareholders, and it’s how it build relationships with customers. All the factors of such relations are under tremendous pressure: demand for loans, credit quality, ability to fund loans, regulatory and rating agency demands. 

He announced new loans BofA made in the fourth quarter - they included: 
• $59 billion in commercial loans;
• Nearly $7 billion in commercial real estate loans;
• $45 billion in mortgages;
• Nearly $8 billion in domestic card and unsecured consumer loans;
• More than $5 billion in home equity products;
• About $2 billion in consumer Dealer Financial Services (auto, marine, RV loans).
• Nearly $1 billion in new credit to more than 47,000 new Small Business customers.
• $1.5 trillion for community development lending.
• $2 billion in philanthropic giving.

• $20 billion in lending and investments to support environmental sustainability.

 

Bank of America has received investments of senior preferred stock from the Treasury under the TARP program, and is also receiving additional support in order to facilitate the acquisition of Merrill Lynch. 

Source: Triangle Business Journal