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Eight Banks Join Bailout Ranks

 Treasury's "healthy" bank program invested $89.2 million in eight more banks last week. These latest additions to the bailout bunch bring the government's total investments up to $689.7 billion in 592 institutions.

The Capital Purchase Program was originally intended in part to spur lending, but Treasury's latest monthly report shows that banks in the program actually reduced both consumer and commercial lending between February and March.

Taxpayers, meet your latest investments:

  • Citizens Bancshares Co. -- $25 million
  • Chambers Bancshares, Inc. -- $19.8 million
  • Community Bank Shares of Indiana, Inc. -- $19.5 million
  • Two Rivers Financial Group -- $12 million
  • CB Holding Corp. -- $4.1 million
  • Fidelity Bancorp, Inc -- $3.9 million
  • Grand Mountain Bancshares, Inc. -- $3.1 million
  • American Premier Bancorp -- $1.8 million

As these smaller banks want in to the program, it seems like other banks can't wait to leave. JP Morgan, American Express and Morgan Stanley said this week that they're planning to sell stock to help repay the government. This comes after Treasury's surprise announcement that the 19 banks to participate in the stress tests must first raise new capital before repaying TARP.

Karen Weise

Karen Weise was an intern at ProPublica and a recipient of the Mark Felt Scholarship for Investigative Reporting at UC Berkeley's Graduate School of Journalism.

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