Official Asks For CPP Expansion

Bartlett testified that non-bank financial institutions “perform equally important roles in supporting and stabilizing the economy, including life insurance firms and consumer finance companies, and the EESA authorizes assistance to all financial institutions.”

“Life insurance companies are a major provider of mortgage funds, and consumer lending companies are a critical component for our consumer industries,” Bartlett said.

Some sources have questioned whether Treasury will open the CPP to Aegon.

Bartlett said the CPP should be made available to foreign-owned financial institutions that have a significant operation in the United States.

“The U.S. customers of those institutions should be able to benefit from the program,” Bartlett said.

“While we understand the public policy arguments [for] not including foreign-owned institutions, there are many foreign-owned institutions that are ‘controlled’ by their U.S. subsidiaries,” Bartlett said. “Additionally, foreign-owned institutions play a significant role in the U.S. market.”

Foreign-owned life insurers account for about 25% of the U.S. life market, Bartlett said.

“Treasury has the statutory authority to extend the program to all types of financial institutions, including foreign-owned financial institutions with significant operations in the U.S., and it should do so, in the context of addressing financial services stability and U.S. competitiveness in global markets,” Bartlett said.

In related news: AEGON put out a statement saying that it does not need core capital and that it is not yet sure whether it wants to participate in the CPP.

But, “in the current market environment, we want to make sure that we carefully explore all financing options,” Jos Streppel, AEGON’s chief financial officer, says in a statement. “And, as a company with sizable operations in the United States, it makes sense for us to examine the terms and conditions which may be available under the U.S. government’s TARP program.”