At least three banks nationally have said “thanks, but no thanks” after being approved for federal bailout funds.
Most recently, Minnesota-based TCF Financial Corp. asked permission from federal regulators earlier this week to return $361.2 million received less than four months ago.
TCF now joins at least two other institutions – Chicago-based Northern Trust and Iberiabank Corp. of Lafayette, La. – that have pulled out of the government’s Troubled Asset Relief Program, or TARP, in which the government has bought hundreds of billions of dollars in preferred stock in banks across the country, according to McClatchy-Tribune Information Services.
For some bankers, what began as a cheap source of capital from the federal government has become a source of stigma and aggravation, McClatchy reported. And $16 billion TCF did itself no favors by holding a team-building event for about 180 of its managers at a ski resort near Aspen.
While it is commendable that TCF decided to opt out of the program, albeit partly as a face-saving gesture, it would be nice if there were more institutions like North State Bancorp of Raleigh, which last November said straight out that it would not participate.
North State’s decision came after the company’s board determined that the company could grow soundly and profitably over the next few years and still remain well-capitalized, without any need of government assistance.
It’s nice to see there are still a few financial institutions out there that understand that just because federal funds are available, it doesn’t mean they have to take them.