WASHINGTON-Data released by the Treasury Department indicates an increasing number of community banks that received federal bailouts are failing to pay the quarterly dividends they owe to the government.
That includes two banks that received assistance only after their congressman went to work on their behalf to obtain the funds.
Overall, 55 banks failed to make dividend payments in November of this year, up 67% over just three months earlier. Analysts attribute the unfunded dividends to struggling community banks that made significant commercial and residential real estate loans.
The news comes at the same time the Treasury is making plans to offer banks about $30 billion in additional federal aid, primarily to spur commercial lending. To date, Treasury has provided $200 billion to nearly 650 banks as part of its TARP program, which requires those banks to pay a 5% annual dividend to the federal government.
Among the banks that have not paid the dividend is OneUnited Bank in Massachusetts, which benefited from Rep. Barney Frank (D-MA) inserting language in the bailout bill to assist the bank.
