Treasury Won't Say If It Has Refused to Allow Banks to Give Back 'Bailout' Money
April 8, 2009Despite repeated requests from CNSNews.com, the Treasury Deaprtment wouldn't say how many banks want to return TARP money and whether it has refused to allow any to do so.
(CNSNews.com) – The Treasury Department won't reveal the names of financial firms that are seeking to return the funds they received late last year and this year under the Troubled Asset Relief Program (TARP)--funds the firms no longer want and would like to give back to the Treasury in return for the federal government surrendering the ownership interests it took in the firms.
Despite repeated requests for the information from CNSNews.com, Treasury spokesman Andrew Williams wouldn’t say how many financial institutions want to give the money back in exchange for getting their stock back.
Williams said the government would only release the names of those banks that have successfully returned the money.
“We don't release the names of those who have applied until we approve the allocation,” he said.
The Treasury Department also will not say whether it has refused any requests from financial institutions to repay the money they took from the government.
“I've got nothing for you," Williams said, when asked if Treasury had refused to take TARP money back from a firm.
So far, five small financial institutions have been allowed to return TARP--or so-called bank “bailout”--money, according to department data that is available. A total of $353 million has been returned.
Three additional firms have applied to return their TARP funds, according to announcements from the banks themselves.
One institution, TCF Financial, which is based in the Minneapolis suburb of Wayzata, Minn., said it has been waiting since early March to hear whether Treasury will return the stock it owns in TCF in return for getting the money back.
“In truth we just haven’t heard one way or another, so they’re still looking at it and reviewing it and we hope to get an answer soon,” TCF spokesman Jason Korstange told CNSNews.com.
TCF, which is the largest bank to have attempted to return taxpayers’ money, wants to give back $361.2 million in bailout funds it says it didn’t need in the first place.
If successful, it would more than double the amount of public money returned to Treasury.
Korstange said that TCF was approached by Treasury to participate in its Capital Purchase Program because it is a healthy bank, but that recent changes in the program and statements from political leaders cast its participation in a negative light.
Korstange said his bank wants to return the money because of “all the changes” that have been forced on TARP.
Treasury came to the bank with the money, he said, not vice versa.
“When we took the money, it was because only the good banks were going to get the money, the strong banks,” Korstange told CNSNews.com. “We believe that we are and we know that we are a strong bank and that’s why they came to us and asked that we take it (TARP money).
“Then public perception, quite frankly, led by some of the politicians, changed--it became bailout money and it completely changed the perception of what (the TARP program) is.”
After Congress began considering additional limits on executive pay and closer inspections of participating banks, TCF decided to get out as soon as it could.
“Once that happened, the politicians decided they could run the banks (and) that they could tell us all the things we can and cannot do,” Korstange said. “So we just said, ‘Hey, we don’t need this, we didn’t need it at the beginning, and we’ll give it back to you.’"
Two other firms have announced they have applied to return the money they received from TARP--Sun Bancorp of Vineland, N.J., and Shore Bancshares of Easton, Md.
Sun, which applied March 11, said it expects to repay the funds this week. Shore Bancshares applied on March 26 and has not announced whether it will be allowed to return the money.
The other banks who have sought to return the money echoed TCF’s concerns, saying that congressional and administration actions have changed the rules and "stigmatized" their participation, creating a competitive disadvantage, especially executive compensation requirements and proposed federal regulation.