The U.S. Treasury Department should not have let large insurers qualify for the Troubled Asset Relief Program by acquiring small thrifts, Sen. Charles Grassley says.
Grassley, R-Iowa, the highest-ranking Republican on the Senate Finance Committee, cites the $4.3 billion in aid that Hartford Financial Services Group Inc., Hartford, (NYSE:HIG) and Lincoln National Corp., Radnor, Pa., (NYSE:LNC) received from the TARP Capital Purchase Program as examples of problems with TARP management.
The ability of insurers to get into a program meant to support banks and bank lending by buying small thrifts, and the Treasury Department’s previous reluctance to provide detailed reports on use of TARP funds by TARP recipients, validate grassroots skepticism about the program, Grassley says.
“There shouldn’t even be a question about whether the Treasury Department would report on how the $700 billion taxpayer-sponsored bailout was being used by those who got the money,” Grassley says in a statement.
In the report, SIGTARP officials provide some details, long sought by members of Congress and others, about how selected TARP recipients have used TARP funds.
SIGTARP officials assert in the report that Lincoln and Hartford probably received far more TARP aid than the thrifts would have been able to get on their own, then went on to use most or all of the TARP aid to support operations unrelated to lending to individuals and small businesses.
Treasury officials told SIGTARP that the insurers’ participation in TARP was consistent with program rules.
That response “misses the point,” SIGTARP officials write.