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Friday, August 3, 2012

ABA Urges Geithner to Support Two-Year Extension of TAG Program

ABA yesterday urged Treasury Secretary Timothy Geithner in a letter to support a two-year extension of the Transaction Account Guarantee (TAG) program after he expressed skepticism -- but also an open mind -- about an extension at a Senate Banking Committee hearing last week.

"Our judgment so far has been it’s not necessary to extend [TAG] … ,” Geithner told the committee. “But I know this is an issue and a concern to many people, and we’re going to have to look at those concerns carefully.”

“We appreciate your willingness to carefully examine the benefits of a temporary extension,” ABA President and CEO Frank Keating said in the letter to Geithner. Keating explained that ABA carefully evaluated the benefits and costs of extending TAG and concluded that a temporary, two-year extension would benefit consumers, small businesses, municipalities, and financial institutions.

He emphasized that the key driver of ABA’s decision was the economy’s uncertain path, and the continued concerns of bank and credit union depositors about the safety of their deposits.
We believe that the extension of the TAG program for two years is consistent with the [Fed’s] monetary policy and will help to promote economic stability, facilitate job growth, and reduce uncertainty.
ABA continues to stress to members of Congress the need to quickly enact a “clean” bill to extend the TAG program as the days on the legislative calendar dwindle.

Read ABA’s letter.

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