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U.S. banks may pay dearly for government aid

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http://www.iht.com/articles/2009/03/10/business/banks.php

U.S. financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must lower dividends, cancel employee training and morale-boosting exercises, and withdraw job offers to foreign citizens.

As public outrage swells over the rapidly growing cost of bailing out financial institutions, the administration of President Barack Obama and lawmakers are attaching more and more strings to rescue funds. Some experts say the conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, but others say the conditions go beyond protecting taxpayers and border on social engineering.

The gov't should have stipulations for receiving this bailout money...

Some bankers say the conditions have become so onerous that they want to give the bailout money back.

What the hell did they take it for if they don't need it and can give it back???

C.R. Cloutier, the president of MidSouth Bank of Lafayette, Louisiana, and a survivor of the savings and loan debacle, said that his institution accepted $20 million from the rescue fund because he and his board believed it was patriotic and would help them offer loans during a recession. But faced with what he says is an unwarranted stigma of participating in the program, as well as the new restrictions that are imposed on banks taking the money, he is now considering whether to return the money, as other institutions have sought to do.

More importantly what qualifications did the gov't have for giving this money to the banks? Just whoever had their hand out?

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Posted · Report post

The first round of TARP, iirc, was basically a no-strings-attached handout until they added restrictions after the fact. Who in their right mind wouldn't take millions or billions in that case? It's like winning the lottery.

Once they added restrictions and it wasn't money for nothing, the sparkle of TARP quickly dissipated as banks realized it wasn't a free meal ticket and they would have to change how they do business as a result of accepting the funds. Since they really enjoy their posh, fancy retreats, bonuses and skyrocketing compensation, the requirements of the TARP funds really put a damper on the party.

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Posted · Report post

Who in their right mind wouldn't take millions or billions in that case? It's like winning the lottery.

So bascially you're saying that the bankers are greedy bastards.

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I don't thing the banks will just change their business practices without finding other ways to nickel and dime the customers to make up any shortfalls cause by gvt. oversight . Well, actually they already do that now. Maybe they will move up to "quarter" and "dollaring" us now.

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So bascially you're saying that the bankers are greedy bastards.

Not at all, I'm saying those greedy bastards are bankers :P

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Posted · Report post

Now it will cost me a $5 fee if I use anything other than a BofA atm.

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Posted · Report post

I haven't used an ATM for anything in 15 years. If I did though, I would change my habits to keep them from getting the $5.

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It's a brilliant plan actually. The greedy banks are exposed for what they really are, the worst off banks will get the help and take the conditions, and competition dictates the rest.

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Posted · Report post

^^ I wholeheartedly agree

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