Private Banks Can Apply for TARP Investment

The Treasury Department has opened the door for privately held bank and thrift holding companies, as well as Community Development Financial Institutions, to apply for capital injections under Treasury's capital purchase program. "Top tiered" financial institutions must apply by Dec. 8 to their federal regulator for a capital injection, according to Treasury. For institutions that are not in a holding company structure, they can qualify if they file a holding company application by Dec. 8. Meanwhile, community banks are still waiting for Treasury to spell out how mutual and S-Corporation institutions can apply for capital injections. Treasury Secretary Henry Paulson told a congressional committee that $148 billion has already dispersed under the capital purchase program and more applications are being processed. "We are developing a matching program for possible future use which could apply to banks and/or non-bank financial institutions." Under a matching program, the secretary said a bank might have to raise $1 in common stock for every $1 received from Treasury.