Report: U.S. Turns Profit on Bank Bailout

Early Returns on Taxpayer-Funded Rescue Show U.S. Making About $4B, New York Times Reports

(CBS/AP)  The U.S. government has hauled in about $4 billion in profits from large banks that have repaid their obligations from last year's federal bailout, The New York Times reported Sunday.

Last September, Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressed congressional leaders for legislation authorizing a $700 billion financial bailout of some of the nation's largest financial institutions, which were in danger of collapsing. The bill was signed into law in October.

Critics of the bailout were concerned that the Treasury Department would never see a return on its investment. But the government has already claimed profits from eight of the biggest banks.

The Times cited government profits of $1.4 billion from Goldman Sachs, $1.3 billion from Morgan Stanley and $414 million from American Express. It also listed five other banks - Northern Trust, Bank of New York Mellon, State Street, U.S. Bancorp and BB&T - that each returned profits between $100 million and $334 million.

The government has also collected about $35 million in profits from 14 smaller banks, the Times reported.

Overall, the government's return on investment amounts to a 15 percent annual profit.

But Federal investments in some other banks, including Citigroup and Bank of America, are still in question, and the government could still lose much of the money it spent to bail out insurance company American International Group, mortgage lenders Fannie Mae and Freddie Mac, and automakers General Motors and Chrysler.