GE Takes Advantage Of Loophole To Gain Taxpayer Money

June 29, 2009

US (ChattahBox) – The benefits that General Electric have exploited using a loophole in the Temporary Liquidity Guarantee Program, a part of the overall federal bailout program has made it clear that an overhaul is necessary to secure those companies that do, and do not, qualify.

GE was able to secure funds from the government to eliminate their debt, due to the fact that they own two small lending institutions in Utah. But because the majority of their corporation is unrelated to banking they have been able to do so without the harsh business restrictions faced by other lenders.

It is one of several examples of how a loophole in the original plan has allowed various companies to slip through the cracks, reaping benefits without paying a penalty.

“We’d like to regulate companies according to what they do, rather than what they call themselves or how they charter themselves,” Treasury spokesman Andrew Williams was quoted in the Washington Post.

The Obama Administration now plans on drafting a new plan that will close that loophole, and force anyone who is getting relief funds to be labeled strictly as a banking institution, and to be subject to all restrictions and stress tests that larger companies have been forced to undergo.


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