Bailed-out banks are complaining:
Financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must slash dividends, cancel employee training and morale-building exercises, and withdraw job offers to foreign citizens.
As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.
The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering.
Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachs and Wells Fargo.
They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago.
Other institutions like Johnson Bank of Racine, Wis., initially expressed interest in seeking bailout funds but have now changed their minds. Bank executives told The Milwaukee Journal Sentinel that one reason they rejected the government money was to avoid any disruption in the bank’s role in the local community, including supporting the zoo or opera company if they chose to.
WTF? Yes, banks — if you get millions, or even billions, in taxpayer money because you f'ed up your business, you've got to expect some taxpayer oversight.
The article goes on to note that some of the "strings attached" might cause banks to lose money. Well, join the club. Everybody has lost money. (Want a gander at my 401(k)?)
But, you might argue, we can't have banks lose money. That will make them insolvent. And how will that help the economy?
Well, apparently some banks are not too concerned about insolvency, if they intend to return the bailout money.
Which brings up the larger point in this: If the banks are in such a position where they can return bailout money, then why did we give it to them in the first place?