September 22, 2008
DFI Assessing Treasury Proposal to Purchase Troubled Assets from Financial Institutions
As you probably know, the United States Department of the Treasury has sent a legislative proposal to Congress requesting authority to purchase troubled assets from financial institutions in order to promote market stability and help protect American families and the U.S. economy. The legislation provides, among other things:
- Treasury authority to purchase troubled assets from financial institutions limited to $700 billion outstanding at any one time;
- Authority to manage such assets;
- Designate financial institutions as agents of the government; and
- In exercising authority the Secretary of the Treasury shall take into consideration means for providing stability or preventing disruption to the financial markets or banking system, and protecting the taxpayer.
This fast moving legislation is expected to be voted on by Congress this week. Commissioner Haraf has been in regular contact with the Conference of State Bank Supervisors and other state and federal regulatory agencies to determine the impact of the proposed legislation on California licensees and to advocate for the protection of the dual banking system and fair and equitable treatment for financial institutions of all sizes.
Licensees should consider contacting their Congressional representatives as soon as possible.