TREASURY DEPARTMENT’S
FINANCIAL STABILITY PLAN
Separate from the stimulus package, the Treasury Department recently announced a multi-pronged program intended to help lay the groundwork for
restoring the flows of credit to households and businesses. The major components of the plan include:
• A Public Private Investment Fund, jointly run by the Treasury and the Federal Reserve, with financing from private investors, to buy up hard-to-sell
assets that have bogged down banks and financial institutions for the past
year. Treasury Secretary Geithner said the new fund, often described as a
“bad bank” for holding toxic assets, would start with $500 billion with a goal
of eventually buying up to $1 trillion in assets.
• Expanding the existing Term Asset-Backed Securities Lending Facility
(TALF) from $200 billion to as much as $1 trillion in order to restart the se-curitized credit markets that in recent years supported a substantial portion
of lending to households, students, small businesses and others. TALF would
also expand to include commercial mortgage-backed securities (CMBS).
• Direct capital injections into banks, using funds from the remaining $350
billion from the Troubled Asset Relief Program (TARP).
• An extension of the FDIC’s Temporary Liquidity Guarantee Program (TLGP)
to October 31, 2009. This program is intended to provide more liquidity to
banks and financial institutions.
• A new framework of governance and oversight to help ensure banks receiving funds are held responsible for appropriate use of those funds through
stronger conditions on lending, dividends and executive compensation,
along with enhanced reporting to the public.
DTV Delay Act
On February 11, 2009, President
Obama signed the DTV Delay Act
into law, officially postponing the
date for digital television transition
to June 12, 2009. Under federal
law, American television stations
must end their analog broadcasts
and begin broadcasting exclusively
in a digital format by this date. Any
consumers who receive free, over-the-air television programming in
their homes could lose reception
unless they upgrade by purchasing
a converter box, purchasing a new
television with a digital tuner, or
subscribing to a paid television service. The government is providing
$40 coupons for certified converter
boxes. Go to www.dtv2009.gov for
more information.
FOR TOP LEGISLATIVE NEWS VISIT
www.irem.org/puBlicpolicY.
State Budget
Shortfalls
The biggest issue facing state leg-
islatures in 2009 is budget gaps.
According to a report by the National
Conference of State Legislatures
(NCSL), nearly two-thirds of states
are facing budget shortfalls nearing
$50 billion for fiscal year 2009. Due
to the struggling economy, states
are seeing a decrease in revenue
from capital gains, income and sales
taxes. As a result, many states are
considering wide-sweeping spend-
ing cuts on Medicaid, education and
corrections programs. Additionally,
commercial real estate profession-
als need to be aware of state finan-
cial situations, because when state
revenues decrease, state legislators
and governors propose new taxes
and fees.
