Bank Of America Wants To Begin Paying Back Bailout Money, Avoid Government "Fee"

The Wall Street Journal says that Bank of America is interested in paying back a portion of the bailout money it received, with the goal of getting out from under the purview of the salary czar and reduce a “layer of federal involvement in its affairs.”

From the WSJ:

The bank isn’t offering to repay all of its $45 billion in aid from the Troubled Asset Relief Program, as several other banks have done. Instead, BofA is suggesting it could start with the $20 billion of additional aid supplied in January when the bank was hesitating to complete its takeover of loss-ridden Merrill.

Repaying this would mean BofA would no longer be considered an “exceptional” aid recipient — a designation that has put it under a microscope by Congress and regulators, with its pay packages subject to review by the federal “pay czar.”

In a somewhat ironic twist, Bank of America is also trying to get out of a loss-sharing agreement it has with the government, but according to the WSJ, there is a dispute about… well… it sounds like an early termination fee to us:

In addition to giving Bank of America extra TARP money, the government agreed in January to absorb a chunk of losses on a $118 billion pool of assets owned by BofA and Merrill. The bank would be on the hook for the first $10 billion in losses, and the U.S. would cover 90% of the remainder….

If the bank wanted to end the arrangement, an “appropriate fee” was required. The Treasury and the Federal Reserve are asking the bank to pay between $300 million and $500 million to end this plan and pushing executives to consider a number on the high end of that spectrum, said a person close to the situation. The bank is now considering the request.

What’s the word for this? Oh yes, schadenfreude.

BofA Seeks to Repay a Portion of Bailout [WSJ]
(Photo:e. wilder)