US Bancorp Blasts TARP As Giant Bait And Switch On America

U.S. Bancorp CEO Richard Davis took shotgun blasts to the TARP program for being a fat big lie. “We were told to take it so that we could help Darwin synthesize the weaker banks and acquire those and put them under different leadership,” Davis said. OMG – truth alert!

“We are not even allowed to mention that. …We were supposed to say the TARP money was used for lending.” He went on to say he would be “darned” if US Bancorp were to become part of of the “collateral damage” from the government’s “sloppy attempt at nationalizing the [banking] industry.” In so doing, Davis became the first major banking CEO to not talk horseshit since the crisis began.

U.S. Bancorp CEO Davis rips TARP [TwinCities.com]

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  1. Plates says:

    Politicians lie? Why I never!

    • varro says:

      @Plates: Yep….the bailout was a bipartisan clusterf*ck.

      Hank Paulson with his threat to bring about martial law, but also Barney Frank in rallying Democrats to vote for the bailout.

    • Trai_Dep says:

      @Plates: I’m trying to imagine the personality profile of someone squatting on Consumerist to pounce on every story with the same one-note* comment, and it’s not a very pretty one. At all.

      * yeah, I’m one to talk about pouncing, but at least I’m chording, hepcats!

  2. Brian Johnson says:

    Did someone force him to accept the money? If he thought he could do a better job without it then why doesn’t he do it?

    • metsarethe... says:

      @Brian Johnson: Yes, a few of the banks were pressured into taking the money. The gov’t didn’t want only the weak banks to take it and cause a run on them

    • Scott Lepsch says:

      @Brian Johnson: They did force many of the major banks to sign off on TARP and accept the money, most notably Wells Fargo who didn’t want to participate because they had responsibly minimized their subprime exposure.

    • lars2112 says:

      @Brian Johnson: Lots of major banks (most of the top 20) were “told” to accept the funds to help the banking industry…. even if it meant buying up smaller banks that the FDIC would end up shutting down otherwise.

      • Shadowman615 says:

        @lars2112: From the article, it sounds like Bancorp’s spokespeople backtracked a little after that speech:

        But by Tuesday afternoon, a U.S. Bancorp spokesman said Davis had misspoke, and meant that because the largest banks in the country took TARP money, U.S. Bancorp and others were forced to do so as well, for competitive reasons.

  3. bohemian says:

    Wait. Didn’t some banks refuse TARP money because they didn’t want the oversight and rules?

    I will believe what he is saying when he backs it up with some proof. He might be right but I hardly trust anything said by anyone in the Financial industry including what day of the week it is.

    • Robert M Getch says:

      @bohemian: You can view on their site Stockholder info and Webcasts where he notably informs people that they have yet to use the loan and its just sitting around until they decide what they wish to do.

  4. Robert M Getch says:

    U.S. Bancorp is the 6th largest bank in asset size in the U.S., refusal to take it by such a large bank would look like a failure for TARP.

    U.S. Bancorp has not used the funds borrowed as well, they are still waiting for a use. U.S. Bank continues to lend and do business as usual *GASP* without government help and now has loan not being used.

    Fantastic work everyone.

  5. kwsventures says:

    Finally someone taking abuse from losers in Congress is fighting back. Reminds me of the day dictator Obama said “there was no pork in the stimulus bill”. Had I been in the audience I would have shouted “Bull Crap” to that lie.

    • Jim Topoleski says:

      @kwsventures: There IS no pork. Seems a lot of people failed in what the definition of PORK is.

      Pork is when a SPECIFIC program for ONE particular senator or rep is included in a bill that only helps one specific state or area of a state. THATS Pork.

      The spending in the stimulus bill is open to any state who wants it. THATS not pork

      Spending in it of its self is also NOT PORK. I mean fucking christ its a STIMULUS BILL, the whole point of a bill like that is to spend money.

      But what should I expect from a retard who thinks Obamas a dictator after 1 and a half months and missed 8 years of the other guy throwing american citizens in prison without ever being tried.

      • Scott Lepsch says:

        @Jim Topoleski: “Pork is when a SPECIFIC program for ONE particular senator or rep is included in a bill that only helps one specific state or area of a state. THATS Pork.”

        That is what a large part of this bill is made up of. $8B maglev trains in Nevada for Harry Reid (when there is a private version already being built). Billion dollar battery plants, etc. There are many specifically targeted projects in blue states as a reward, and it is most definitely pork.

        To not be pork, they could have announced a maglev project where different areas (including red states) could apply for funds based on their project’s merit. (for example to counter the pork example above)

        • Trai_Dep says:

          @Scott Lepsch: Or more likely, it’s the Blue states that already have invested in green tech, so when the Oilgopolist hayseeds in the Bush administration were driven out on a rail, and we finally, sanely, decided to start digging ourselves out of the hole that Big Oil has mired us in – surprise – it was only the Blue States that had any projects worth funding. (hint: drilling for oil in the Grand Canyon doesn’t qualify as projects worth funding)

        • Jim Topoleski says:

          @Scott Lepsch: Obviously you have never read the bill.

          The 8 billion is for advancing public transportation trains, NOT just the Nevada one. NJ/NY is also going to be making a grab for that money to expand the Newark airport monorail to cover a lot more of the area it was supposed to before funding was pulled as are a few other states.

          And I would LOVE for you to explain to me how battery plants only benefit a particular state or area. Certainly nothing in the bill says only northern states can get this.

          And as for it helping out blue states, so what? First off going by last election most of the country is a “blue state” now and I for one would be glad to have some funding back to our states after the republicans did there best in the last 8 years to strip us bare of ANY funding. Need I remind you one of the first things the Bush government did was shut down nearly EVERY military base about the mason dixon line as punishment for voting against them (and ADMITTED IT.)

          • Trai_Dep says:

            @Jim Topoleski: AND tried to remove the State Tax deduction from Federal taxes, thus punishing states that invested in anything besides casinos and 10 Commandment statuettes. These are the very types of things that provide alternatives today to, well, anything that Texas is funding.

        • Crim Law Geek says:

          @Scott Lepsch:
          Except the stimulus doesn’t include any funding for any trains in Nevada, or any train from LA to Las Vegas. Please stop quoting Rush Limbaugh’s opiate-induced delusions, or their repetitions on WorldNetDaily or Drudge.

          • trujunglist says:

            @Scott Lepsch: @Crim Law Geek:

            If there were to be funding for a train from L.A. to Las Vegas, then it would be an investment well worth making for the entire country, since California gives back way more money than it borrows. You know how they have to have an EIR/EIS for something that big? That provides jobs. You know how they have to build something like that, and it takes a crapload of people? Yeah, jobs, in one of the states that is hurting the most and can provide the most labor. You know how we’re looking for alternative forms of energy/transport? Yeah, that’s one of them. You know how companies need things like budgets to get started working on these projects or similar, and if money isn’t provided, then people will lose their jobs? You know, states don’t get shit done for free from local companies just because it’s the right thing to do…
            Get your head out of your ass. If you think a high speed train from Little Rock to Houston is a good deal, then propose it, but since we all know it would end with a loss, we’ll never do it.

      • ARP says:

        @Jim Topoleski: There are a few very specific programs that will inevitably benefit a small number of states.

        But I agree with you, even if it was all pork, that’s sort of the point. Pay to get people working and they will start spending money. The view was (and I agree) that tax cuts only were not sufficient as someone who is unemployed doesn’t really care if there’s less tax because he has no income to tax.

    • Saboth says:

      @kwsventures:

      I haven’t looked at the bill in minute detail, but from what I saw…are the programs there going to create jobs? Yes. Are there BS programs in there like “pumpkin festivals”? No. So yeah, you might be rewarding certain states more than others, but perhaps they need it, or are set up to deliver technology (like wind generators), etc.

      Just more Republican hyperbole and sour grapes. If they don’t like the bailout, tell them not to accept it for their states. It will definately help cut down the bailout. If they had actually DONE THEIR JOBS for the past 8 years, we wouldn’t even be discussing this.

  6. Seth Burn says:

    A few things I want to clear up:

    1. Taking the tarp funds was not optional. Paulson called the heads of the 9 largest banks into a room and insisted they sign on to the plan, or else.

    2. The stimulus bill is littered with pork. That is kind of the point.Give a lot of people money for doing things of “some” usefulness (debatable usefulness) and hope they spend said money. I don’t expect it to work, but that is my opinion, nothing more.

    3. Karl Denninger has consistently provided the most accurate analysis of the situation (again, my opinion), and you can go to his website and read back the previous 50 or so posts to get a good feel for the situation.

    • OwenKlient says:

      @Seth Burn: It’s ridiculous this notion that the government “forced” them to take the money, “or else”. Or else what? If they don’t want the money, don’t need the money, don’t intend to use the money, then give it the fuck back to the government. Now that he’s backtracked to say that he took the money for “competitive reasons,” he needs to STFU or return the money.

      • Trai_Dep says:

        @OwenKlient: Well, actually, the Fed chairman can. One of the major strikes against Greenspan is that he had vast powers of influence* that he let sit idle, instead of bursting both the internet and subprime bubbles before they became continent-striding catastrophes.

        * “influence” as in… How best to put this… Remember that scene in The Godfather, when Vito wanted to change Johnny Fontane’s contract? Yeah, that kind of “influence”.

        • OwenKlient says:

          @Trai_Dep: Yes, but what exactly? What “influence” could the fed use to force a *functioning* bank to accept money it doesn’t need or want?

          • Trai_Dep says:

            @OwenKlient: Well, so far as I know (anyone with anything to add?), they don’t talk about it. But for the most part, what the Fed asks, the financial companies hop to it. Presumably because the Fed has a pure monopoly on what the banks base their business on, and that his role is to be an honest broker keeping the entire system intact.
            LTCM cost unrelated financial companies billions, which they contributed to save the world, with nary a whimper. I’m assuming that there was some sort of quo later for the quid the companies delivered, but so far as I know (again, anyone’s input appreciated), no one involved provided details.
            Love to hear more from people who’re more familiar of any details, though.

            • metsarethe... says:

              @Trai_Dep: Of course politicians can force banks to take the money. Think of it like your boss asking you to do something that really isn’t your responsibility but he needs to meet a tight deadline, do you help him out or do you take a stand and say it’s not your responsiblity? And if you refuse, you think your boss will treat you the same if you decide not to help him?

              Same situation here

          • t-r0y says:

            @OwenKlient: There, but for the grace of the Fed, go the banks. It’s a giant pyramid scheme — with the American people at the bottom.

            Here’s a great explanation of how it all ‘works’…

            Money As Debt – Fractional Reserve Banking – Cartels Robbing the Public (1/5)

          • mac-phisto says:

            @OwenKlient: the federal reserve is the primary regulator for national banks – a bank with a national charter is required to belong. simply put, if a bank were to piss them off, they risk losing their charter. that would kill a bank.

            realistically, i don’t think the fed would go that far, but they pretty much hold all the card here. to understand the power we’re talking about here, watch the frontline documentary featured here a few days ago –> [consumerist.com]

            if they had to break out the guns, they would probably conduct a thorough investigation into a bank’s operations. virtually anything they find could be used for replacing leadership. simply leaking an investigation to the press would send the bank’s stock into a tailspin. add to that pressure from the treasury & you’re pretty much dooming your bank to a forced merger or bankruptcy.

        • t-r0y says:

          @Trai_Dep: Unfortunately, Greenspan didn’t sit idle, he kept interest rates too low, for too long! He did that to keep the bubbles from bursting. Low interest rates helped fuel the demand for housing. “Wow. Cheap money, let’s buy more house than we can afford, simultaneously out-bidding someone else and raising the price higher than it should be”.

          I was a Greenspan fan a long time ago, but he lost his way — maybe one loses focus when one is inside the machine.

          • Trai_Dep says:

            @t-r0y: The Fed does MUCH more than simply meeting every quarter and tweaking the Fed rate. Your point is a good one (shocking: we agree?! :D). But there were any number of things he could have done by picking up a phone that would have killed the subprime (or the internet, before) bubble before they got big.
            He allowed his blind ideology to overrule the facts on the ground, twice. Shame, that.

            • t-r0y says:

              @Trai_Dep:

              But there were any number of things he could have done by picking up a phone that would have killed the subprime (or the internet, before) bubble before they got big

              While I agree he had the power to do something/anything, I’m not sure that the path was clear. The question being: what to do, that doesn’t actually make matters worse. I do not envy him that power/choice. But I do believe, in hindsight mind you, that keeping rates low for as long as he did, was the WRONG thing.

  7. Cycledoc says:

    In the full article:
    “But by Tuesday afternoon, a U.S. Bancorp spokesman said Davis had misspoke, and meant that because the largest banks in the country took TARP money, U.S. Bancorp and others were forced to do so as well, for competitive reasons. “

    Selective use of quotes is to say the least disingenuous. Bankers, mortgage types and their ilk in part, got us here. They shouldn’t strut too much as they are part of the problem. This guy doesn’t want regulation but the industry has already shown that it can’t be trusted. They need supervision to keep themselves (and us) out of trouble.

    Considering the S and Crisis, Enron and this, how many more financial disasters caused by deregulation can we handle?

    • Trai_Dep says:

      @Cycledoc: Or, to paraphrase further, “If you gave us a blank, $trillion check with no strings, review or accountability, as Paulson originally planned, I wouldn’t be b*tching now. (And, can you working folks spend another trillion to buy our wildly inflated toxic junk at inflated prices – our bonuses don’t look very encouraging right now. xxxooo. Thanks!”

  8. ogremustcrush says:

    US Bank actually weathered the subprime crisis pretty well, just like Wells Fargo. Their stock didn’t begin to tank until the entire stock market tanked, including non financial related companies. I know because I own USB stock.

  9. Jonbo298 says:

    This makes me glad I bank with them. I want a CEO who isn’t afraid to speak his mind. Though their website needs an overhaul still…

  10. Anonymous says:

    @ brian johnson – some banks were forced to take the money. the treasury dept feared that if consumers knew which banks were the weak ones (ie the ones that had to have tarp money) it would lead to a run on those banks causing more stress on the system. forcing all the largest banks to take the money limited the chance of that happening

  11. Nighthawke says:

    Back on Thursday, Rick Santelli of CNBC popped off on TARP, declaring a “Tea Party in July” accompanied to whistles and cheers from the traders while on the traders floor at the Chicago Mercantile. His “Shout Heard ‘Round The World” drew cheers, jeers and invites from alot of folks. The White House had a knee-jerk reaction, not only mentioning him by name 9 times during a press conference, but also inviting him to the White House to study the TARP with them over coffee.

    Mr. Santelli agreed, but he’ll be drinking tea though.

    [www.cnbc.com]
    [www.cnbc.com]
    [www.cnbc.com]
    [www.cnbc.com]

    One reporter put forth a suggestion that he should run as senator if the opportunity arose. His riposte “I’d rather have a job where I would not be taking a shower every hour.”

  12. savdavid says:

    I remember that puff piece that 60 minutes did on Bank Of America and the CEO saying that they were told by Paulson they had to take 25 billion in bailouts as it was “their patriotic duty”. Yeah, patriotic and loyal to themselves is what he must have meant.

  13. Anonymous says:

    Funny how a few here trash the CEO’s, as if our own Government is so honest. If anything, I would bet anything the CEO’s are telling the truth. The U.S. Bancorp CEO has no reason to lie, in fact he even said last year they didn’t need any Government help.

    Yet people still try to trash any bank. Despite the fact a CEO finally stands up and speaks the truth. Unlike all the cowards meeting before congress who just said what congress wanted them to say.

    Its our own Government that lies to us day after day. They are the ones trying to cover up their own mess. It doesn’t matter whether they are Republican or Democrat, they all lie.

    • t-r0y says:

      @SupriyaLiopleurodon: Well said! Reminds me of the old joke …

      How can you tell when a politician is lying?
      His/Her lips are moving. (ba dum-bump)

      Oh, and this one …

      Whats the opposite of Congress?
      Progress.

      Get it? Get it? Con vs Pro? Don’t worry, I’ll be keeping my day job.

  14. u1itn0w2day says:

    I can’t agree with him more .I to thought the whole point of TARP in the begining especially was to make it easy for banks to lend and hopefully lend at reasonable rates .

    So now you have banks aquiring other banks and jacking you by doubling your interest for being 1 day late .It all comes back to GREED .

    It’s about the banks and financial types maintaining their status quo .Just look at all the bonuses they have given or tried slipping by under other names .

  15. drdom says:

    Having Paulson, Barney Frank and their comrades tell the profitable banks how to run their business is like getting weight loss advice from a really fat guy.

    Kudos to Richard Davis for having some stones. A little credit is also due Jamie Dimon from Chase, who made similar statements, but not quite as pointed as Davis.

  16. Anonymous says:

    Th best thing to happen would be nationalizing the banks in the first place. Certain things should not have a profit motive, and banking, education and health care should be some of them.

  17. Segador says:

    Fear not, my children. The Messiah will lead us out of the crisis with the even more brilliant Stimulus Bill ’09.