Bank of America pays off TARP

[skydivr]

BoA paid off TARP today back to the government. Good news and this program got us (if temporarily) thru a very bad time in the financial markets. That money needs to go to pay back the original appropriation, rather than be used by the administration for other purposes unless it goes thru another appropriation process with legitimate debate.

Some results:

1. BoA can now again pay whatever bonuses they want (suspect that was main reason they got out of this as quickly as they could).

2. Since they are now not getting government money for free, maybe they'll start paying some freakin interest to depositors.

3. The Government needs to tell BoA unequivocally that they are no longer 'Too big to fail', so they don't let it all hang out ever again and maybe be a little more conservative bank (doubtful - greed). I actually remember when they were a pretty conservative bank.

More importantly, it's little known that BoA is dropping out of the TGLP (Temporary Liquidity Guaranty Program) (linky: FDIC: Temporary Liquidity Guarantee Program Opt-Out Lists) as of the end of the year. What that means is that they will no longer be part of the government program to guaranty 'non interest-bearing transactional accounts' for anything greater than $250K. That means, if your company has a checking account over $250K with BoA, the part over $250K is NOT GUARANTEED AND SUBJECT TO LOSS. I personally think BoA decided that since 'they were too big to fail' and the government will bail them out anyway, that they didn't need to pay this huge 'insurance' premium to the FDIC to remain in the program and hope none of their really large customers find out or do something about it.

I predict when businesses find out that BoA has decided not to protect their transactional accounts over $250K, there will be a huge sucking sound as cash is removed from their bank and moved to other banks who are still participating.

If you are interested in seeing if your bank opted out (was no option to OPT IN), go to that link and look at the state that your bank is headquartered in (you'll find BoA in NC).

 

[TonyMastodon]

smart move on their part... pay it off asap... customers are hurting and paying tons in overdrafts... bank walks away with billions.

Ive been with BoA since 06 I gotta say, Its the only bank ive ever liked.

 

[Tufbusa]

It's good to see we have some sound business left. The money was borrowed from China as I understand it. I think the way the TARP bill was written to require the money to go back to China to pay off the loan as it came in from the companies the Feds passed it out to? We'll see what happens?

 

[racerV]

Now they do not have to abide by government regulations and can do what they want. Don't really think it is a good thing.

 

[Dino]

Same Bank that was jacking up interest rates to 28% for no reason and charging ridiculous payments all the while not giving out loans to help those that were hurting because of the crunch. They should be charged double what they needed to stay in business.

 

[chrisjp]

my mattress has no bail out money in it

 

[skydivr]

Frankly I've liked BoA less and less over the past 5 years. They have gotten too big for their britches in becoming 'everyman's' bank. Their customer service has dramatically deteriorated and their branch personnel turnover rate is huge.

About three years ago, they lost most of our business. Remember when they decided that, to cash a check, you either had to have an account or pay a $5 fee? Well, they decided that included our employees cashing their PAYROLL checks drawn on our BoA Payroll account. That kinda ticked us off and we told them that if they wouldn't honor OUR payroll checks for OUR employees, then we'd find a bank that would. They told us that it was 'policy', so we said 'watch this'. We don't keep near the amount of money with them anymore as we did.