Citi Using Bailout Funds to Make Loans

By David Ellis, CNNMoney.com

posted: 198 DAYS 1 HOUR AGO

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NEW YORK (May 12) -- Citigroup said Tuesday it authorized $8.2 billion in lending to U.S. consumers and businesses so far this year backed by taxpayer funding.

In its latest update on how it is spending government bailout money, the troubled financial giant said it made a number of loan commitments during the quarter, including a $5 billion direct loan program to state and local governments and $1 billion to help homeowners refinance their mortgages.

Citigroup and other large banks have been under intense scrutiny about their lending practices since taking in billion of dollars in taxpayer funds from the government's Troubled Asset Relief Program, or TARP, last fall.

Citigroup has been one of the biggest recipients of government aid to date, taking in approximately $45 billion in TARP funds.

"We are using this capital to expand personal and business lending in the United States, consistent with Citi's prudent lending standards, and will continue to explore every opportunity to put it to work in a disciplined, transparent and responsible fashion," Citigroup CEO Vikram Pandit said in Tuesday's report.

The bank said it also earmarked $2 billion in TARP money for purchasing small and medium-sized business debt and is making $250 million in new automobile loans to consumers via dealerships around the country.