Taxpayers hate the bank bailout. Lawmakers too. And now it looks like some of the bailed out banks themselves are starting to get fed up with it as well.
Just weeks after Congress removed a key hurdle that prevented banks from paying back funds from the Troubled Asset Relief Program, or TARP, some banks are already queuing up with checks in hand.
So far, three banks have formally declared their intentions to pay back the government. Last month, Louisiana-based IberiaBank Corp. said it would return $90.6 million while TCF Financial, a bank headquartered just outside of Minneapolis announced last week it was returning $361.2 million.
On Tuesday, New York City-based Signature Bank became the latest, announcing at a conference it had filed notice with the Treasury Department to pay back $120 million in TARP funds.
This list doesn't include the dozens of institutions that were approved for government aid, but subsequently decided to turn down the money. New Jersey-based lender Sussex Bancorp added itself to that group after it withdrew from the program last week.
But even more banks are poised to return TARP money, including some of the nation's largest.
Asset manager Northern Trust told members of Congress last month that it wanted to repay the $1.57 billion in government funds "as quickly as prudently possible" after the Chicago-based firm came under heavy scrutiny for its sponsorship of a recent golf tournament in California.
And other big banks, including PNC and US Bancorp, as well as JPMorgan Chase and Goldman Sachs, have been stating they hope to return the funds as quickly as possible. A repayment by those four alone would return an estimated $49.2 billion to government coffers.
Why There Is a Rush to Pay Back TARP
Some institutions have argued that it is too costly to keep government capital on their books at a time when banks in general have been resistant to make new loans as the economy sours and more Americans lose their jobs.
Other banks have suggested that the recently passed stimulus package, which included a measure aimed at reining in bonuses for senior executives and top earners at banks that got TARP funds, would harm their firms even further.
"We believe participation in TARP has created a competitive disadvantage for TCF and it is in the best interest of our shareholders to redeem these shares," said TCF Chairman and CEO William Cooper in a statement when the company announced its plans last week.
Many bankers are also troubled by the inconsistency in the government's rescue efforts so far. Others worry that regulators or lawmakers could change the accompanying terms of the government's capital purchase program as they see fit in the future.
For example, some fear that banks which have received TARP funds could be pushed to make certain types of loans or fulfill some sort of loan quota, following the ongoing public outcry that banks are not lending.
"The biggest issue is just the fact that the rules can change," said Alan Avery, a partner in the financial services group at the law firm Arnold & Porter.
Banks: Take my TARP, please!
Posted 12 March 2009 - 01:30 PM
Posted 12 March 2009 - 01:39 PM
Posted 12 March 2009 - 01:52 PM
Posted 12 March 2009 - 01:54 PM
Posted 12 March 2009 - 04:25 PM
For some of the banks, the money has been more of a hassel than it was worth.
Posted 12 March 2009 - 05:02 PM
If they don't need it they don't need it. If they do they will live with the restrictions I guess.
I think some of those returning it need it, but just don't want to have to deal with the restrictions and pay cuts or the possible loan quote's.