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| Some Banks, Feeling Chained, Want to Return Bailout Money |
| 2009-03-11 |
| WASHINGTON -- The list of demands keeps getting longer. 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 slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens. As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds. The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering. Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachs and Wells Fargo. They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago. Other institutions like Johnson Bank of Racine, Wis., initially expressed interest in seeking bailout funds but have now changed their minds. Bank executives told The Milwaukee Journal Sentinel that one reason they rejected the government money was to avoid any disruption in the bank's role in the local community, including supporting the zoo or opera company if they chose to. |
| Posted by:tu3031 |
| #4 Government puts onerous conditions on government handouts? Johnson! Stop the presses! |
| Posted by: Steve White 2009-03-11 20:25 |
| #3 Never trust Greeks bearing gifts. Never trust a smiling government giving you money. Too late guys. Obama and Uncle Sam own your asses now. |
| Posted by: DarthVader 2009-03-11 17:04 |
| #2 Importantly, some banks are now refusing to foreclose. When a mortgage fails at a Sheriff auction, the bank can then refuse to take it back. This is done to stick the mortgage holder with any taxes or fines levied on the property. |
| Posted by: Anonymoose 2009-03-11 16:58 |
| #1 The real problem is that delaying foreclosure will result in the banks becoming even more insolvent, as prices on homes continue to plunge to affordable levels, eroding the prices they can get for foreclosed properties. |
| Posted by: Zhang Fei 2009-03-11 16:34 |