Who gave the federal government the power to give any money to any financial institution other than commercial banks? The reason commercial banks could be given money was because they were (supposedly) tightly regulated. During those panicked times of Sept/Oct 2008 the Fed and the Treasury gave away a lot of money under dubious authority. Pretty f**king ad hoc. AIG was saved a week after Lehman collapsed by an initial $85 billion government infusion according to the following
The Fed took the highly unusual step using legal authority granted in the Federal Reserve Act, which allows it to lend to nonbanks under "unusual and exigent" circumstances, something it invoked when Bear Stearns Cos. was rescued in March.
A.I.G.'s trading partners, which included Goldman Sachs Group, Merrill Lynch and the large French banks Societe Generale and Calyon, refused to take less than 100 cents on the dollar on assets that were worth far less because they were derived from rapidly defaulting mortgages.
Their legal stance was that the Fed was a creditor and had no standing to put A.I.G. through bankruptcy. They knew by virtue of the $85 billion loan that the U.S. wouldn't let it fail. So they held all the cards. The Treasury and the Fed capitulated.
This was in stark contrast to the way the government dealt with the automakers:
First, the Fed considered itself a creditor of A.I.G., rather than a regulator that could impose its will on banks. It approached A.I.G.'s trading partners with a request for "voluntary" concessions. Mr. Barofsky said this differed from the government's role in the auto industry, where it lent the car makers money but also negotiated aggressively and won substantial concessions from other creditors.
It's self-serving that the counterparties invoked the letter of the law to assure themselves full payment from the Fed.
And it's obvious to any sentient being that class (as in class warfare) is alive and sickening.