A couple of bad ideas
President Obama wanted to hit the largest banks with a bailout fee; now the Congressional Budget Office has come out with a report saying consumers would end up paying that fee. Read about it here.
The president has also suggested that $30 billion in TARP funds should go to community banks to spur Main Street lending. Many bankers are lukewarm on the idea because there is such a stigma attached to TARP. Treasury is picking up on community banker reluctance and now I am hearing talk about the government giving the $30 billion to the Small Business Administration to make direct loans to small businesses. This, of course, would be a disaster. Bankers don’t need another government-sponsored competitor, and taxpayers don’t need a government lender with goals that put it at odds with safe and sound banking practices.
