Banks to Return TARP Funds

Not all of the banks needed a bailout, and some right now are quite insistent upon returning the TARP funds they received over the last several months. Larger banks like US Bank and Northern Trust as well as smaller ones like Iberia Bank are applying to return TARP funds. It's not just Rick Santelli that is railing against bailout. The more responsible bankers in the world do not want to foot the bill for their less responsible colleagues.

TCF Financial Corp., the Wayzata, Minnesota-based bank that never made a subprime loan and hasn’t lost money since 1995, is asking why it should help clean up the mess made by Wall Street.

“I’m kind of bitter,” said William Cooper, chief executive officer of the 448-branch bank, adding that over the years TCF has invested about $1 billion in the Federal Deposit Insurance Corp.’s fund that guarantees bank deposits. “We pay for the excesses of our competitor over and over again.”

-- Bloomberg

Some of these banks will be able to pay bank the government soon and they can run their business as they see fit in the best interest of the shareholders. After all this crisis is over, it will be very interesting to see what the new banks look like in the services they offer and their underwriting practices.

If the well-managed banks are treated in the same way as the banks with lax standards, what incentive does that leave in the future?