TCF’s CEO Blasts TARP as Bank Goes Off the Dole

  • JJ Hornblass
  • March 4, 2009
  • 1

TCF Financial Corp. is giving the government back its money.

The bank, which has a market capitalization of $1.3 billion, is returning the $361.2 million of TARP dole. What is interesting is that, in returning the funds, TCF has spotlighted what is wrong with the TARP: that it tars and feathers every bank in the program. Here’s how TCF Chairman and Chief Executive Officer William A. Cooper puts it:

In November when we agreed to accept the funds under the Capital Purchase Program, it was with the understanding that only healthy banks would be granted the funds. These healthy banks would then employ the funds within their markets to expand lending to creditworthy individuals and businesses. Recent actions by the U.S. Treasury and possible congressional or regulatory restrictions/mandates changed the rules. As a result, public perception views those banks that took the TARP money as having done so out of weakness and a need to survive without distinction among TARP programs or individual bank capital adequacy. We believe participation in TARP has created a competitive disadvantage for TCF and it is in the best interest of our shareholders to redeem these shares.

Whoa, tell us how you really feel! Just so we’ve got this clear, in Cooper’s view, a) the Treasury and Congress have undermined TARP to the point where it no longer is doing what it was supposed to do; and b) any bank with TARP funds is at a “competitive disadvantage,” or at the least is viewed that way by the public and presumably by the banking industry.

Talk about a broadside from a banker.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at hornblass@gmail.com or 212-564-8972.

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One thought on “TCF’s CEO Blasts TARP as Bank Goes Off the Dole

  1. I’d love to see Wells Fargo give theirs back. Another opnion that I was hearing early on was that TARP recipients woudl be forced to buy out troubled banks. But that too seems to not be the case…or at least anymore. Now they are just falt out giving it away to bad banks which makes the line of thought that it is an orderly way to prop up a bunch of bansk so they don’t fail all at once.

    Tim

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