Banks Giving Back Bailout Money?

Recognized for its food and music, Lafayette, La., is about to become known for something else: the first bank to give bailout money back to the federal government.

CBS News investigative correspondent Sharyl Attkisson reports Iberiabank is giving back $90 million from the Troubled Asset Relief Program (TARP).

"In the very beginning, if you got TARP you had kind of a seal of approval that you were healthy," said William Fenstermaker, the chairman of the Iberiabank board. "And I think as time has gone by, it's turned into, if you took TARP, you were unhealthy."

The original TARP plan, meant for solid banks only, had quickly morphed - deeply-troubled banks got billions, too. And there were new strings attached by Congress last month, such as limits on dividends and executive compensation, and the possibility that Congress will even dictate loans that banks must make.

For Iberiabank, it began to feel like Washington, D.C., had given them a great deal on ... swampland.

"Were you all sitting there saying, 'Wait a minute, what's this program really about?'" Attkisson asked Fenstermaker.

"I think that told us a little bit that things had changed," Fenstermaker said.

Other banks like Iberiabank are also finding that TARP was a package deal they didn't count on. With the tax dollars has come public suspicion - even ridicule - and more government regulation.

Of nearly 500 banks that have received TARP money, at least five have put the Treasury Department on notice that they'll pay it back within 30 days. CBS News has learned that 200 more banks that applied and qualified for TARP funds now say they don't want them.

"I don't think that we should believe for an instant that the government knows better how to run the banking business than good bankers do," said Bert Ely, an independent banking consultant.

Ely says that with the taint surrounding TARP, there's no longer any incentive for healthy banks to take part.

Treasury officials say TARP is still filling the mission: it "helped prevent a system-wide collapse... and we have always intended banks to repay the government" when able, according to a statement.

Back in Louisiana, where Iberiabank never was as deep in those risky loans as other banks, money isn't a problem, and they're happy to take the lead in giving it back.

"Why do you think it's your bank here in Louisiana that decided to pay the money back first?" Attkisson asked.

"Probably the answer is: we could," said Fenstermaker.

Notice to Treasury: watch for the Lafayette postmark - the $90 million check's in the mail.

[ECF1956]

The banks can make more interest on that money than the interest they pay out. Remember that the government is paying interest on BORROWING the money from the Chinese.
I wouldn't only focus on salary--it's the bonuses you want to know about and report. That's where the real money is.
Posted by perk235 at 1:23 AM : Mar 18, 2009

First off, IberiaBank didn't loan out that money, they made no interest on it. Second. I was including bonuses. That compensation is public record and easily found. Third, as a stockholder in IberiaBank, I don't care what the president makes as long as I get a good dividend from my investment. This is not public money, it a business....you can choose where to put your money. IberiaBank "borrowed" that money, it was not given free of charge, the government got prefered stock in return. The only ones you need to criticize is the Democratic Congress on this by changing the rules, the federal government was making money on this investment...not any more.

[fzy1hc]

The Banking industry thought we can do what we want with the money.

But when the government put certain rules they are backing out.

Because they can't give bonuses to their executives and screw the workers.

I worked for a bank ten years ago and management would be buying a car or toys like every two years.

All companies here in the USA stop taking care of management and give raises to the employee's so they will spend money to get the economy going.

Japan has the right way to thier a company!!! One for all and all for one!

[credibility2]

All businesses that received bailout money should give it back to the government and end forever their having to beholden to a government that will want to continue checking all of the hairs on its body and come up with new rules and regulations at whim. This way these companies can do whatever they want to, even fail and even more dramatically impact negatively the economy. I think the government shouldn't give individuals bailouts either. Let them fail as well. Why should any taxpayer help any irresponsible entity. Failure is part of a free market. Our government is deliberately impeding it's recovery by trying to keep it dependent.

[perk235]

The bank didn't ask for the money. They were contacted by the fed because they were a strong bank. They were told use it to bid a failing bank, and they were encouraged to do so. The problem was the congress started changing the rules so they gave it back, WITH INTEREST... The US Government MADE MONEY over a MILLION DOLLARS on this return !!! The sad thing is the bank got nothing in return.
Posted by ECF1956 at 8:43 PM : Mar 17, 2009
-------------------------------------

The banks can make more interest on that money than the interest they pay out. Remember that the government is paying interest on BORROWING the money from the Chinese.

I wouldn't only focus on salary--it's the bonuses you want to know about and report. That's where the real money is.

[perk235]

From Aritcle: ?I don?t think that we should believe for an instant that the government knows better how to run the banking business than good bankers do,? said Bert Ely, an independent banking consultant. "
-----------------------------------

The government's role, outside of the crisis, is to REGULATE banks. There are over $160 TRILLION in derivatives that are imploding the financial system. These derivatives were made by "good bankers".

The top 5 banks holding 95% of the derivatives are JP Morgan, Citibank, Bank of America, HSBC Bank of USA, and Wells Fargo had LOST $587 BILLION from derivatives.

That sounds like people who really know what they're doing.

[whitemale08]

Bank of America and JP Morgan are British funded financial terrorists organizations!

They represent an 'out in the open' mafia cartel that needs to be put down IMMEDIATELY!

[ioweign]

Corporate Welfare is a REPUBLICAN thing...
Posted by jtdev1 at 7:28 AM : Mar 17, 2009

That's amazing. How did the REPUBLICANS manage to extend all these bailouts without any compliance of the Democratically led Congress? Boy those REPUBLICANS are very crafty to be able to pull that off.
Posted by bubba027

It is very convenient for people to forget that the congress which voted for the bailouts and the stimulus packages are predominantly democrats. Even with public opinion opposing the bailouts, these democrats voted for it. They did so even with a republican president and then a democratic president.
Posted by rhs648 at 8:22 PM : Mar 17, 2009



WASHINGTON ? President Bush, warning that the ?American economy is facing unprecedented challenges,? joined Treasury Secretary Henry Paulson Friday in calling for a ?significant? infusion of taxpayer dollars to lift up the flailing economy.

Bush and Paulson warned that everything from retirement savings to home values are at risk if the administration and lawmakers do not act quickly. They want the government to be able to take over worthless mortgages from banks and other financial institutions.

?We?re talking hundreds of billions (of dollars)," Paulson said when asked how high the price tag could run. "This needs to be big enough to make a real difference and get to the heart of the problem.?

Bush expressed confidence that the rescue plan being drafted in Washington will serve to turn around an economy he said was at risk of "grinding to a halt." The White House was expected to hand in a draft proposal to Congress by Friday night, a Democratic leadership aide told FOX News.

Congressional officials said they expected a request with a cost in excess of $500 billion to the government.

Shortly after his remarks, Bush called congressional leaders with whom the administration would be negotiating through the weekend to devise a rescue package. He spoke to Senate Majority Leader Harry Reid, D-Nev., House Speaker Nancy Pelosi, D-Calif., and Senate Republican leader Mitch McConnell. He planned to reach House Republican leader John Boehner later in the day.

[ECF1956]

The bank didn't ask for the money. They were contacted by the fed because they were a strong bank. They were told use it to bid a failing bank, and they were encouraged to do so. The problem was the congress started changing the rules so they gave it back, WITH INTEREST... The US Government MADE MONEY over a MILLION DOLLARS on this return !!! The sad thing is the bank got nothing in return.

[ECF1956]

What CBS left out of this story was first Iberia Bank is a growing regional bank and their executives don't make anywhere close to the big bank's salaries. The president of the bank makes less than $700K. Mr. Fenstermaker, the Chairman of the Board, has another job running a regular small business that involves engineering, nothing to do with banking or finance. Another thing is this bank paid over $1 million dollars in interest to the US government for that TARP money they never used. And this bank pays good dividends to their stockholders like me.

[rhs648]

Corporate Welfare is a REPUBLICAN thing...
Posted by jtdev1 at 7:28 AM : Mar 17, 2009

That's amazing. How did the REPUBLICANS manage to extend all these bailouts without any compliance of the Democratically led Congress? Boy those REPUBLICANS are very crafty to be able to pull that off.
Posted by bubba027

It is very convenient for people to forget that the congress which voted for the bailouts and the stimulus packages are predominantly democrats. Even with public opinion opposing the bailouts, these democrats voted for it. They did so even with a republican president and then a democratic president.