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Today's Top News
Bank of America Mulls Repaying Aid: Report
NEW YORK - Bank of America is seeking to repay some of the billions of dollars in US government aid it has received in a bid to reduce federal involvement in the company, The Wall Street Journal reported Tuesday.
The federal government, meanwhile, is pressing the bank to pay about 500 million dollars to end a tentative pact that would have seen the government share its losses on some Bank of America assets, the Journal said, citing people familiar with the matter.
A man uses an ATM at a Bank of America branch on July 28 in Pasadena, California. Bank of America is seeking to repay some of the billions of dollars in US government aid it has received in a bid to reduce federal involvement in the company, The Wall Street Journal reported Tuesday. (AFP/Getty Images/File/David Mcnew) The move comes as several US banks have repaid government aid they received as part of the Troubled Asset Relief Program (TARP), a federal bailout.
Although Bank of America is not seeking to repay the full 45 billion dollars of TARP aid it obtained, the company has proposed starting by returning the 20 billion of additional aid it received in January while hesitating to take over troubled investment firm Merrill Lynch.
By repaying some of the aid, the Charlotte, North Carolina-based bank would no longer have its executive compensation packages reviewed by Kenneth Feinberg, the "pay czar" of President Barack Obama's administration.
But the Journal cautioned that even giving back the funds would not end government involvement in the bank, which still operates under a "memorandum of understanding," a strict regulatory sanction that requires it to improve its risk and liquidity management while also overhauling its board.
On top of the additional TARP money, the government agreed in January to cover losses for a 118-billion-dollar pool of risky assets owned by the bank and Merrill Lynch.
Bank of America would be responsible for the first 10 billion dollars in losses, while the government would cover 90 percent of the remaining assets, the newspaper explained.
In return for the protection, the bank would issue four billion dollars in preferred stock that carried some 320 million dollars worth of annual dividends to the Treasury Department. It would also pay the Federal Reserve 236 million -- two-tenths of a percent of the value of the risky assets.
Should the bank want out, the Treasury and Fed asked for an exit fee of between 300 million and 500 million dollars, the Journal said, noting that Bank of America was now considering the request.
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Show AllThis situation defies understanding of anyone who has ever managed his/her own financial affairs. I borrow money from a bank in return for agreeing to let that bank put limits on the salaries I can pay to my employees. I decide to "consider" paying back the money if the bank will relinquish its control of my employment policies. If I do, the "czar" at my local bank won't exercise that control, though I'll still be subject to some unexplained "regulatory control." What to do, what to do? If I pay back only the portion that the bank gave me when it was trying to force me to buy out a competitor, that will do the trick. Maybe best to pay back that much of the money. Then maybe I'll go ahead and give $10 million a year to 4 employees (myself, my wife and my two daughters) and don't worry about "regulation," because what's regulation without a czar to regulate? On the other hand...oh hell, my brain is getting tired and besides it's time for the football game.
Should my kids "mull over" paying back their student loans?
Joe
"By repaying some of the aid, the Charlotte, North Carolina-based bank would no longer have its executive compensation packages reviewed by Kenneth Feinberg, the "pay czar" of President Barack Obama's administration."
They only have to repay "some" of the money before they lavish their executives with $billions in bonuses? Nice deal! Too bad the idiots in Washington didn't use the money themselves to prop-up the stock market and then walk away with the profits for "The People" like the TARP banksters are doing for they CEOs and shareholders.
Does anyone dare say that this TARP, TALF and other bailout bullsh!t isn't "corporate socialism"?
Goldman Sachs, which received roughly $23 billion in TARP money (some of it came through AIG), made just $2.3 billion last year, but paid $4.8 billion in executive bonuses.
Morgan Stanley, which also received around $10 billion in TARP money, paid out $4.5 billion in bonuses after a 2008 profit of just $1.7 billion.
JPMorgan Chase, which received a minimum of $25 billion in TARP money, earned $5.6 billion last year while paying out $8.6 billion in bonuses.
And for 2009: "NEW YORK -- The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy."
http://www.reuters.com/article/marketsNews/idINN2732083820090827?rpc=44
"Emergency" lending programs for the wealthy in this country who are moving their money out of this country. If you haven't heard economist, Dr. Michael Hudson's interview, IT'S A MUST!
:http://www.informationclearinghouse.info/article23386.htm
For a very short time, I had a Visa card thru B of A. When I contested a bogus $405 motel bill, they said they would work with me to delete it, but then flipped me off.
SCREW BANK OF AMERICA ! ! ! !
It's time we play their game. We rob their banks. Legally. We target the BIG “piggy banks”. Bank of America, Citicorp, Chase and Wells Fargo. We play with money. Our money. We take it AWAY from them.
Take your money out of the big banks and put it into smaller ones. As you walk away make sure you let the bank manager know you are linking their particular “reversal in fortune" to the filthy rich lobbyists who are writing bailouts for every industry including health insurance and banks. Don’t forget to do that part. Then you try to convince as many people that they need to do the same thing
We slowly get people to move a great deal of money OUT OF the big banks into smaller ones. We tie it to the fact that we are tired of having our laws written by a bunch of rich lobbyists, big bankers included. Can you imagine what bank managers would be reporting back to their CEO's?
THEN sit back and watch what Congress does.
It’s time to use your money wisely. Break their back like they broke yours. TAKE IT AWAY from them.