The Financial Services Roundtable and the Consumer Federation of America asked the Department of the Treasury today for a piece of the Emergency Economic Stabilization Act money, the bailout money, to help banks and card issuers reduce the credit card balances for borrowers who don’t qualify for other government assistance like repayment plans.
So far, the Treasury spent $125 billion of the bailout money to buy stock in banks and bank holding companies:
- Citibank: $25 billion
- JP Morgan Chase: $25 billion
- Wells Fargo: $25 billion
- Bank of America and Merrill Lynch: $25 billion
- Goldman Sachs: $10 billion
- Morgan Stanley: $10 billion
- Bank of New York Mellon: $3 billion
- State Street: $2 billion
Should the government also provide money to credit card issuers to forgive debt for consumers who don’t have the means to pay? If so, the most likely recipients will be Discover and Capital One, as well as Citibank, Bank of America, and JP Morgan Chase, who have already received a portion of the bailout.
Update: According to more recent news reports, the groups did not ask for a piece of the bailout money; they petitioned the Treasury to allow the banks to forgive a portion of the debt. In return, the banks would be allowed to write down their losses over a long period of time.
Updated May 26, 2009 and originally published October 29, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.