If I had time, I'd research this more, but take a look:
Barack Obama Maintains Control Over Banks By Refusing to Accept Repayment of TARP Money - WSJ.com
This article in the Wall Street journal stemmed from information obtained first hand by Judge Andrew Napolitano, the judicial analyst of Fox News, in a meeting he had with the CEO of one of the top 10 bank holding companies that was mentioned in the OP. Napolitano, in particular, is one person I trust to be truthful. Not just because he's with the Fox News organization, but because he's always solid in what he talks about (at least in all the times I've seen him speak). This story dove tails with a lot of other broadly reported stories of TARP funds being returned by some banks for various reasons, among the most significant of which being the unwanted strings that the money comes with. They want to get rid of their debt to the government as fast as possible.Obama Wants to Control the Banks
There's a reason he refuses to accept repayment of TARP money.
By STUART VARNEY
I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?
My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.
It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration's thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.
If the banks are forced to keep TARP cash -- which was often forced on them in the first place -- the Obama team can work its will on the financial system to unprecedented degree. That's what's happening right now.
Here's a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.
Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He's been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with "adverse" consequences if its chairman persists. That's politics talking, not economics.
Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can't a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can't special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit -- until now.
Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I'm an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration's goal of controlling the financial system.
After 35 years in America, I never thought I would see this. I still can't quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.
Mr. Varney is a host on the Fox Business Network.
Our Government Engaged In EXTORTION With Our Banks!
Our Government Engaged In EXTORTION With Our Banks!
By Judge Andrew Napolitano
FOX News Senior Judicial Analyst
The Federal government committed extortion and they’re not being held accountable. What’s next? Listen to this: I recently met with the Chair and CEO of one of the country’s top 10 bank holding companies. His bank is worth in excess of $250 billion, has no bad debt, no credit default swaps, no liquidity problems, and no subprime loans. He told me that he and others were forced by Treasury and FDIC threats to take TARP funds, even though he did not want or need them.
There is simply no authority in the U.S. Constitution for Congress to exercise the level of control it now seeks over private industry.
The FDIC — with Treasury backing — threatened to conduct public audits of his bank unless his board created and issued a class of stock for the Feds to buy. The audit, which he is confident his bank would survive, would cost it millions in employee time, bad press, and consequent lost business.
He pleaded with the Feds to leave his successful bank alone. He begged his board to let him tell the Feds to take a hike. But they gave in. The Feds are now just a tiny shareholder, but want to begin asserting more and more control. This is a classic extortion: Controlling someone’s free will by threatening to perform a lawful act. (Blackmail is the threat is to perform an unlawful act in order to control someone else’s free will.) There are no exceptions in the statutes prohibiting extortion for government persons
This happened in September 2008, but the demands for more control are more recent. It sounds to me like Paulson, Geithner, Bernanke, and Sheila Blair have all read a biography of Benito Mussolini. I guess they skipped the last chapter.
There is simply no authority in the U.S. Constitution for Congress to exercise the level of control it now seeks over private industry. In fact, this level of control will wind up costing the businesses that took TARP (voluntarily or involuntarily) money since they will lose key employees who will go to work elsewhere and because the reporting requirements will take time and time is money. The Constitution basically says that if the government wants to take time or freedom or money from someone or something, it must sue for it. It cannot just give itself the authority to do so via legislation.
Our liberties are slipping away right before our eyes.
4 Banks Become First to Repay TARP Money - DealBook Blog - NYTimes.com
4 Banks Become First to Repay TARP Money
March 31, 2009, 4:43 pm
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Four smaller regional banks on Tuesday became the first financial institutions to return the federal money they had received under the government’s banking bailout, leaving a program that placed restrictions on their executive compensation and other spending.
The banks — Signature Bank of New York; Old National Bancorp of Evansville, Ind.; Iberiabank of Lafayette, La., and Bank of Marin Bancorp of Novato, Calif. — said they had bought back a total of $338 million in their preferred shares, which had been sold to the government in the fall under the $700 billion Troubled Asset Relief Program, or TARP, in exchange for capital.
A number of banks have been chafing under the restrictions imposed by TARP. Northern Trust of Chicago said in February that it would repay more than $1.5 billion “as quickly as prudently possible” after a hail of criticism from Capitol Hill over its lavish entertainment spending at a golf tournament in suburban Los Angeles.
Goldman Sachs, Wells Fargo, JPMorgan Chase and Bank of America are among the biggest banks that have said they are aiming to return the government’s bailout money.
The big banks were told in the fall by then-Treasury Henry M. Paulson Jr. that they were required to accept TARP money in order to strengthen the banking system, which had been severely shaken by the global financial crisis. But President Obama’s economic stimulus plan, enacted in February, changed the rules to allow banks to pay back the money ahead of schedule. It also tightened the restrictions on bonuses and other spending.
Signature Bank returned $120 million to the Treasury. It said the tightened restrictions on TARP money “adversely affected our business model.”
“It became apparent that we should return these funds to the Treasury,” Joseph J. DePaolo, Signature’s chief executive, said in a statement. “The return of these funds allows us to continue to execute our business model, which includes the successful recruitment and retention of highly talented banking professionals throughout the metropolitan New York area.”
Old National returned $100 million after performing what it said was “a rigorous stress test on the company’s balance sheet and earnings.” It asserted in a statement that it was “well positioned to withstand current and future economic challenges.”
Iberiabank, the first bank to apply to leave TARP, returned $90 million. “We are pleased to be among the first financial institutions to pay back the Treasury’s TARP investment,” Daryl G. Byrd, the bank’s chief executive, said in a statement.
Bank of Marin returned $28 million. “Given the operating restrictions we experienced as a participant, we believe this decision is in the best interest of our customers, shareholders and employees,” Russell A. Colombo, the bank’s chief executive, said in a statement. “We feel we are well positioned to continue lending in our community without additional capital support.”