Among the banks returning TARP funds to the federal government this week was BB&T, which considering the libertarian convictions of recently departed president John Allison, surprisingly accepted bailout money even though BB&T did not need it. In a December interview with The Charlotte Observer Allison explained why he took the funds:
ALLISON: We took it for two reasons. One, there was a lot of regulatory pressure on the large banks to take TARP (Troubled Assets Relief Program). They very strongly -- very strongly -- encouraged banks our size to participate. And, if you allowed your competitors to get it and you didn't, it would hurt you relative to your competitors, so you had an obligation to your shareholders to take it. ... It would be like the original [economic stimulus] program, where they gave everybody up to, I think, $600. Well, you could have been opposed to that, but if they were giving everybody else $600, why wouldn't you take yours?
However, we still would have rather there not been a program. The net effect has been negative to us. A lot of banks have been helped that otherwise we would have been able to acquire. [The government was] supposed to give the money to very healthy banks, but they're also giving it to banks that are very marginal.
OBSERVER: What are you using your TARP money for?
ALLISON: Just for general purposes. We're still growing our lending business, [but] we already had enough capital. The other thing is, the Treasury is encouraging banks to acquire marginally healthy banks, and TARP money could be used for that purpose. [But] we already had enough money to do acquisitions.
Now upon repayment, it appears BB&T regrets it accepted TARP money:
Seven months after it accepted $3.1 billion from the federal government, BB&T Corp. - a longtime opponent of big government - repaid the money with interest Wednesday....
BB&T said it accepted TARP loans despite the bank's philosophy because regulators strongly urged it to. The bank said Wednesday that it had paid $93 million in interest on the government loan and indicated that it wasn't happy about the expense or the distraction.
"This was, in fact, an excellent investment for the American taxpayer," chief executive Kelly King said in a statement - subtly refuting critics who called the TARP loans a bailout.
Does the RICO Act apply to the federal government?