It is being reported today that a number of banks are unhappy with the restrictions placed on them for accept government money. For example, CEOs are complaining executive pay limits are too much! It seems that this is a GOOD thing as it is causing incentive for the banks to pay back the taxpayers as quickly as possible. Of course, the executives have their own excuses for paying back the money, or in the case of BOA, no explanation at all:
NEW YORK — Bank of America Chief Executive Ken Lewis said on Monday that the bank wants to repay government investments under the Troubled Asset Recovery Program (TARP) within months. “My hope is it’s months, not years,” Lewis said in a conference call hosted by CLSA analyst Mike Mayo. “But we just have to see how the capital markets operate and then how the economy does. Because the whole intent of this exercise has been to make sure that banks have the proper amount of capital so that they can, in fact, lend money in this environment. So the pay back will be dependent on not only our view of things, but also the regulators view of things,” Lewis added.
It seems the main strategy for the banks to pay back the loans is to sell more stock. U.S. Bancorp is planning on selling $2.5 billion worth of stock, Capital One Financial Corp estimates raising $1.75 billion by offering 56 million shares and BB&T Corp. will raise about $1.5 billion.
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