Obama to Limit Dividends From Banks Getting ‘Exceptional’ Aid

[struggle4progress]

Source: Bloomberg

By Julianna Goldman and Holly Rosenkrantz

Jan. 13 (Bloomberg) -- Barack Obama will order the Treasury Department to limit executive compensation and dividend payments by financial institutions that get “exceptional assistance” from the financial rescue fund, Larry Summers, a top economic adviser to the president-elect, told Congress.

Summers sent a letter to congressional leaders yesterday outlining the conditions that Obama supports in tapping the second half of the $700 billion Troubled Asset Relief Program.

“Those receiving exceptional assistance will be subject to tough but sensible conditions that limit executive compensation until taxpayer money is paid back, ban dividend payments beyond de minimis amounts, and put limits on stock buybacks and the acquisition of already financially strong companies,” he wrote.

Obama wants more of the money funneled to community banks and small businesses, as well as steps to loosen credit for individuals and help for homeowners facing foreclosure, said Summers, picked by Obama to head the White House National Economic Council. He also wants greater oversight of the aid program and a public accounting of how the money is spent ...

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