The government gives...and now the banks say no thanks. With all the scrutiny these banks have received lately, a few of the banks that were asked to participate in the TARP program are now saying that they'd like to return the money and get out of the program. They are tired of the media spotlight. Even though the money came cheap, they don't want the government running their internal operations. So who wants to send back the money?
Signature Bank of New York announced that it would return the $120 million it received from the government just three months ago. It indicated that the new restrictions on executive compensation weren't palatable to them, so they're ready to return the money. The rumor mill for who else will return the money continues, but The New York Times reported that TCF Financial Corporation, Iberia Bank of Lafayette, LA, Goldman Sachs and Wells Fargo are among those who may just give it all back.
The question may be; why did they take it in the first place? Some banks like Goldman and Wells were asked to do so. Former Treasury Secretary Hank Paulson asked that all major financial institutions participate so that they wouldn't be singled out for taking it and therefore a run on the bank would ensue.
I won't say where I bank for business however I do bank at a local bank that is doing just fine. I talked to one of the managers and she stated that their bank didn't have many foreclosures on the books but took some of the money "in anticipation of the collapse of the commercial market."
What is your opinion? How do you think this will affect the residential real estate market? Would you take a bailout on your real estate business if it meant you would have extensive over site from your BIC, company owner or even the real estate commission?
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