TCF to rid itself of TARP
TCF Financial Corp. to return $361.2 million in federal bailout money
Excerpt:
TCF Financial Corp. said it received government approval to return $361.2 million in federal bailout money, and will cut its quarterly dividend by 80 percent.
The Wayzata-based regional bank, which has $16 billion in assets, originally received an investment from the U.S. Treasury Department's Troubled Asset Relief Program, TARP, last November. But after tighter restrictions were placed on banks receiving the funds, TCF chief executive Bill Cooper filed notice in March that he intended to return the funds.
On Monday, TCF said the U.S. Treasury gave the bank permission to buy back all the 361,172 shares of preferred stock it issued to the government under TARP, effectively enabling the bank to exit the bank bailout program.
The move will boost TCF's profits because it means the bank will not have to make dividend payments to the U.S. Treasury. The bank estimates its earnings per share will improve by over 14 cents per share annually as a result of the move.
"Participation in the TARP has created a competitive disadvantage for TCF and we believe it is in the best interest of our stockholders to repurchase these shares," Cooper said in a written statement.
Comment: Good for them!
The thing that gets me is that somehow the government thinks it's their right to tell banks whether they can pay back a loan. Even the worst banks don't arrogate that to themselves.
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