i'd like to see some of those returned TARP funds go towards more projects, things like public parks and road improvements. (my thought is, if we're going to run up the national debt, make it something that i can actually see and use)

I would love a train, plane, and subway overhaul. I hope that magnetic train plans go threw. That would be worth the money.

Or, we could just pay down the national debt, which my great-great-grandchildren will still be paying off.

Then again, I'm still paying for that corn chowder I bought at Disneyland six years ago on my credit card.

By being a bank that is paying back TARP funds that they "may not have deserved in the first place", is that a bank that didn't ask for the money and didn't want it to begin with?

How is a bank paying back TARP funds that Paulson and the Treasury Dept. strongarmed them into taking so as to not expose those banks that were clamoring for the assistance a "calculated government gamble that is now paying off"?

@gStein: Give the money back to the taxpayers or to our Chinese lenders. Or, destroy it and not print replacements.

"I'd like to see some of those returned TARP funds go towards"... etc ...

This money never really existed - the government gave treasury IOUs to the banks to give them money so they would not have to unwind complex derivatives positions which, since everything was in an economic freefall, would have meant huge losses - the banks needed this temporarily because they did not have enough capital to cover themselves in the mixed-up, strange market last year - the government just assumed the risk temporarily by printing IOUs (the same difference as giving the banks fiat currency), giving the banks good, solid securities (relatively speaking) on their balance sheets temporarily to offset against the bad stuff until the market improved and they would not have to dump the bad stuff at fire-sale prices and take huge losses which would lead to a cascading collapse of these positions - all the banks did was give the IOUs back to the government - no money was created or destroyed in these transactions, it was all on paper - so there is no actual free money here to spend on your favorite government projects. The bad news is, I don't think a single house has been saved in all this mess and nothing has really changed: the mortgage market is still in the tank, the credit card market is still in the tank, and interest rates are still at a level where it pays to set your money on fire at the end of the day rather than lose money tomorrow. Throw in the government obligations for medicare & social security when the baby boomers retire in a few years, and there's nothing to feel good about.

Here's the deal, the Treasury made all the banks accept the money whether they needed it or not. Had they not done so, it would have more publicly shown which banks were in real trouble and which weren't, which would have spread even more panic in the system.

Bottom line: Some TARP bailouts were forced upon the banks by the government and they want out.

Fixed it for you!

@Tyler Knox: "...want out so they can resume shady lending practices and screwing over customers without any oversight."

You left off a bit there.

Isn't this the money that was forced upon various banks who never wanted it in the first place?

TARP wasn't a "calculated gamble." Banks were instructed to collectively participate. The purpose of the act and the intervention was to motivate banks and other participants in the credit markets to lend to each other. Without daily interbank lending, the financial world ends.

The banks that are being allowed to pay the money back have demonstrated a satisfactory degree of financial fitness to Treasury. More importantly, Treasury feels that the actual provision of taxpayer capital is no longer necessary for the financial system to function. All 10 of these banks paid big dividends on preferred equity right to Treasury in addition to principal - 9 remain, and repayment from those institutions is also likely. TARP looks like a huge success, unpopular as it was.

@HiPwr: Thank you. For your perusing pleasure: [www.ritholtz.com]

Well it is easy to pay back the money when you get it from the government though backdoor deals using AIG as a conduit.

*cough cough*

Goldman Sachs Group Inc. and J.P. Morgan Chase were paid 100% on the dollar from the TARP for fraudlent insurance agreements with AIG. When do we get that repaid?

Well, that's good. Now we can get to dealing with everything else that's screwed up.

@HiPwr: i might have a flawed understanding, but i don't think the TARP funds are supplied by the chinese... i think it's just printed money.

@gStein: Correct, the Chinese didn't hand over a wad of cash and say "this is for TARP." However, the Chinese are our biggest debt-holders and that situation isn't getting any better. If fact it is getting worse because the Chinese are starting to doubt that we can pay back all that we owe them.

@Ben Popken: Thanks, Ben, came in to say this.

The comment: "that they may or may not have deserved in the first place" is really unnecessary snark. Most of these banks didn't need the money. Others only needed the money because the government rushed them to take over other failing banks so they wouldn't have to pay out of FDIC money.

I know Consumerist is an anti-corporation blog, it doesn't take much reading it to get that bias. But this propaganda isn't helping people be better consumers, it's making them hate all corporations as "evil".

@laserjobs: [citation needed]

@laserjobs:

The sale of AIG businesses and assets, as well as continuing operation, is intended to recoup the series of bailouts the fund received. It will be interesting to see how successful that is, and what the equity owners will think about how that went down.

@HiPwr: I came in here to post exactly that.

In some cases, these banks had no choice in the matter. "Hey, guess what - you're getting bailout dollars. Don't want 'em? Don't need 'em? Too bad! By the way, here are all the strings that are attached."

@HiPwr:

Private American interests are the biggest holders of American debt, actually. China is the largest foreign debt-holder, and their holdings are dwarfed by the domestic private-sector position. Treasury prices move based on many circumstances - China is a factor, but hardly the only one or the most substantial.

So where did the overdraft fees go *before* all these economic problems hit? Executives' pockets?

@TheFlamingoKing: you'll get that back when AIG repays their TARP money. AIG borrowed that money, not Goldman Sachs. GS was just a creditor of AIG, which is why they were repaid. I guess you think only creditors that you approve of deserve to be paid what they are owed?

@JollyJumjuck: Overdraft fees are not repaying TARP funds. Banks are required to raise new capital in order to repay TARP. Overdraft fees go to the bank's bottom line, and eventually their shareholders.

This is just a shell game. Goldman Sachs is paying back $10bn in TARP funds, yet it received a $12bn pass-through of federal funds from the AIG bailout making GS 100 percent whole on their investments in credit default swaps. Let's see them repay the feds for that little gift.

@Unsolicited Advice: Really? Is that why Hillary Clinton and Timmy Geithner both paid visits to China with their hats in their hands?

@Unsolicited Advice: Success? Money was taken from it and given to automobile manufacturers. When are we going to see the "success" in that? So far, of the billions that have gone out, we have gotten back 2 things: a pair of bancruptcies.

This whole TARP scheme was hatched by the Bush Admin to repay their buddies in the banking industry.

Its pretty clear the funds were NOT needed and that we should have just let them ALL fail.

They only want to repay the bailout so they can get their big bonuses back.

@bearymore: Do you pay Geico back when they reimburse you for a car accident? No? Then why should Goldman pay AIG (aka the gov't) back for making good on its insurance obligations?

I hardly see it as a gift when a contractual obligation is fulfilled.

@gStein:

The repaid money goes back into the governments general fund.... Technically it will slightly reduce the amount of debt we have to issue to pay for the stimulus etc.

@Unsolicited Advice: Some would disagree that banks are healthy, and that their balance sheets allow them to get off the government teet. The only thing keeping all of these huge banks afloat is the implicit guarantee that the US Government won't let them go under. TARP has only been a success at continuing the political favoritism enjoyed by large financial firms:

[baselinescenario.com]

@jayphat:

TARP was never intended to bail out automakers. Recall that the funding decision was pressed by Congressional Democrats who, at the time, were not in favor of additional bailout expenditures.

TARP broadly succeeded in its stated goals. Subsequent perversions of its intent don't seem as relevant to me. I suppose it does diminish the "huge success" somewhat, fair point.

@HiPwr: All the presidents and politicians have done so, ever since we started buying everything from them and they became a larger and larger debt holder (Bush II contributed much to our national debt and Obama is gearing up to do the same). Don't just make it about one party.

@JGKojak:

Many Banks have stated publicly that they didn't need/want TARP funds and were coerced into accepting them. That said, stating they were "not needed" is a statement with far more hindsight than perspective. At the time, banks and credit market participants had ceased lending to each other due to irrational fears about their collective solvency.

"Letting them all fail" would have had real consequences for other industries and created a severe, long-term economic crisis of unprecedented size and scope. Worst, it would have been unnecessary, as the passage of time has proven that most of the terror in the marketplace that could have destroyed our economy and banking system was unreasonable.

@HiPwr: Yes. That is the exact reason. Hats in hand. That's precisely it. On the button.

@gStein: The stimulus allows for public works projects. The TARP allows the banks that were too large to fail to remain just that.

@TheFlamingoKing: "I know Consumerist is an anti-corporation blog, it doesn't take much reading it to get that bias. But this propaganda isn't helping people be better consumers, it's making them hate all corporations as "evil"."

So, why do you come here? By the way, do you know the secret Communist Party handshake? No!? Impostor! Get him! He's a plant!

@cmkennedy: A few comments:

1) Many of the banks that said "no thanks" did so because they didn't want the strings, not because they didn't need the money. So they were willing to bring their own bank down (in addition to the impact on the banking system) just because they didn't want to follow a few rules.

2) You trust the banks that made some of the worst financial decisions in a generation at their word that they don't need the money.

3) It was a public confidence move so that everyone would know that the major banks had enough money to prevent a run on a bank. If some got it and others didn't, it could have led to a panic on the banks that didn't accept the money (especially given #2)

BTW- What were all the strings? From what I read, they didn't seem all that bad or crazy: Run your bank responsibly, use this money to lend responsibly. Don't just pay yourself enormous bonuses (which they got around anyway).

@ARP: Perhaps you didn't read my comment below pointing out that it was Bush's secretary Paulson that started us down this road. I don't play the partisan bullshit.

@LegoMan322:

We are about as likely to get that as I am to getting a company car now that I am a 60% stakeholder in GM.

There have been banks that did not want to accept the money and/or give the money back right away. The government wouldn't allow it.

TARP was created to get the hand of government into the private sector of finances. Since then, the government has set up roadblocks preventing these banks for returning the money until they wanted it (i.e., "stress tests") and the Federal Reserve has kept NO record of how this money was spent. The government demonized institutions for taking the money and using them to pay out contractually-obligated bonuses, all while they knew this money would be used to do so. Meanwhile, Barney Frank was getting sweetheart deals from Freddie and Fannie for himself and for his lobbyist friends.

It would have been better to have the banks fail, the market correct itself, and keep the government out of the financial institution altogether.

wow how irresponsible our government is. They are paying back the loans, and we want to spend that money elsewhere now? It was supposed to be because of absolute emergency only. We don't even have that money to spend, it's borrowed. Shameful practices.

@TheFlamingoKing: So, being pro-consumer in your eyes is anti-corporate? What a slave you must be to predatory, unethical companies. Break your chains, baby, freedom tastes damn sweet!
@Ben Popken: THANK you. We were a cat's whisker from global financial collapse and the stock indices had already dropped many hundreds of points in mere days. A fact that some seem to forget, even though it was mere months ago.
It took a LOT of testicular fortitude to launch a program trying to prevent worldwide financial lock-up, in spite of the no-nothings' wails of complaint (sorry, guys, Herbert Hoover isn't a viable role model during such times). It's my opinion that they're even more annoyed that it looks to be shaping up that not only was it the correct prescription, but we'll be getting much of the monies back.
Especially considering the Conservative "solution" would have been to give Paulson $700B to throw around as he pleased, with no oversight, accounting or involvement from the other two branches of Federal government.

A really sucky situation, not of their own making, but it looks like they played the cards they were dealt quite well.

It's a gift if they couldn't possibly keep their contract on their own. Like if I bet my friend 1 trillion dollars on a coin flip and lose, then the government comes in and pays my friend 1 trillion dollars to save me from bankruptcy. In a way my friend just got what he was owed, but more realistically we just made out like bandits.

@dragonfire81: ... And by 'Oversight' you must mean letting uninformed lawmakers control the banks without having to actually write legislation. Damn that constitution, it's always getting in their way.

@Dooley: For that to happen, we would need to cut spending. That's not what we've been doing for the past... fifty years. Especially not the last year.

@Trai_Dep: PS, TARP was from the Bush administration (it was passed in 2008). The changes that Obama made were adding $200,000,000,000, adding more strings to the money, and in February Paulson's replacement, Geithner, decided to go to Paulson's original plan of buying (or assisting investors in buying) toxic assets from the bank.

The program that you so laud the launch of and the testicular fortitude required was in fact launched by Bush. However, inasmuch as it was a "Conservative Solution" it was the "Democratic Solution" so just be thankful that the GOVERNMENT worked something out. Arguing about political parties is like arguing about Microsoft versus Apple - neither party particularly cares about you as a person so don't associate yourself so deeply with them.

@TheFlamingoKing: So I tried to say a similar thing in an email to the Consumerist...and I got a less than professional response. I don't think they care anymore.

The site is doing well and they have a corporation behind them. Seems the Consumerist was a figment of our imagination. Damn shame too.

Well, this is good. They're paying back. Unlike GM. I was fine with bailout *loans,* I'm fine with bankruptcy, but I'm not fine with both bankruptcy *and* government equity stake. Kudos to the banks!