Treasury distributes another $1.5B to 39 banks

WASHINGTON -- The government said Thursday it has distributed an additional $1.5 billion to 39 banks as part of the $700 billion financial rescue program.

The latest capital infusions, which were made on Jan. 16, bring the total amount used to buy bank stock to $193.8 billion. Nearly 300 banks in 43 states and Puerto Rico have received support through the program.

The outgoing Bush administration also spent an additional $20 billion last week to provide support to Bank of America and $1.5 billion to bolster Chrysler's auto financing arm.

Those payments brought the Bush administration's total bailout program spending to $299.6 billion.

The government plans to devote $250 billion of the program's first $350 billion to making direct purchases of bank stock as a way of bolstering banks' resources and lending.

The latest injections of money ranged from $400 million provided to the First BanCorp of San Juan, Puerto Rico, to $1.75 million for the Community Bank of the Bay in Oakland

The government is required to publicly disclose its disbursements through the $700 billion rescue program within two business days after the payments are made.

The additional $20 billion for Bank of America is not counted as part of the $250 billion "Capital Purchase Program." Instead, this money was provided through the "Targeted Investment Program," which also has provided $20 billion to troubled Citigroup.

The new report also included the $1.5 billion provided to Chrysler Financial Services, the auto financing arm of Chrysler. The loans provided to Chrysler, General Motors, and GMAC, General Motor's auto financing arm, now total $20.8 billion.

All of the activity on Jan. 16 occurred on the last full business day for the Bush administration because Monday was a federal holiday.

Former Treasury Secretary Henry Paulson and other Bush political appointees left office at noon on Tuesday when President Barack Obama took office.

The Senate last week turned back an attempt to deny the Obama administration access to the second $350 billion from the bailout fund. However, Obama's economic team has stressed that it plans to overhaul operation of the program to heed widespread complaints from lawmakers about how the Bush administration managed it.