Citing an uncertain regulatory environment, yet another bank has said that it plans to return bailout funding it received under the Troubled Asset Relief Program.
South Dakota-based Home Federal Bank will return the $25 million it received in November as part of the Treasury Department's efforts to shore up the banking system and inject liquidity into the market. It will also pay accrued dividends.
Curt Hage, president of Home Federal, told Keloland Television that it did not want to be subject to the regulatory whims of congress, which in recent months have led to a spate of rules for banks accepting TARP funding, including restrictions on executive pay, dividend payments, and other uses of cash.
"It seems like every time there's new regulation or new bill entered in Congress, the preamble to it is, 'And to those with TARP funding, we're going to do this or that.' You just never know from one moment to the next what kind of new restrictions are going to be placed on the operation," Hage said.
Returning the money is not an automatic process. The Treasury has said that banks must be able to prove they can survive without the government's financial assistance and loan guarantees.
South Dakota-based Home Federal Bank will return the $25 million it received in November as part of the Treasury Department's efforts to shore up the banking system and inject liquidity into the market. It will also pay accrued dividends.
Curt Hage, president of Home Federal, told Keloland Television that it did not want to be subject to the regulatory whims of congress, which in recent months have led to a spate of rules for banks accepting TARP funding, including restrictions on executive pay, dividend payments, and other uses of cash.
"It seems like every time there's new regulation or new bill entered in Congress, the preamble to it is, 'And to those with TARP funding, we're going to do this or that.' You just never know from one moment to the next what kind of new restrictions are going to be placed on the operation," Hage said.
Returning the money is not an automatic process. The Treasury has said that banks must be able to prove they can survive without the government's financial assistance and loan guarantees.
published May 25, 2009, 0 Comments
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