NEW YORK (
Bank of America
took long enough to find the TARP exit, but it finally got one foot out the door.
A deal with the Feds is being hashed out to repay at least part of the $45 billion taxpayer bailout provided to Bank of America from the Troubled Asset Relief Program, according to the
Wall Street Journal
How long has BofA CEO Ken Lewis been saying that he regretted taking the extra $20 billion in bailout money to help ease the takeover of
Well, he's finally getting to prove he didn't need the money as his bank brokers
to repay that portion of the taxpayer dole BofA received.
I'm sure it wasn't easy getting to this point. One of the reasons it took so long may well be the Obama administration's reluctance to let go of the power it inherited after the incursions into free enterprise orchestrated by the Bush administration.
Repaying $20 billion in TARP funds will allow the bank to escape some of the restrictions placed on the "exceptional" aid recipients -- including the irksome scrutiny of the new federal pay czar. We all know how Bank of America and Merrill love their pay perks!
If this deal goes through, Bank of America will part company with the likes of
- considered the most troubled companies in the nation because of the amount of government intervention required to keep them afloat.
Now BofA will get the chance to associate with a more respectable class of banks such as
, which managed to elevate its stature in the financial world with some decent earnings reports despite the fact that it has yet to repay the TARP funds it received.
So what did it take for Bank of America to get the Feds to ease their grip?
The government is reportedly pushing BofA to pay between $300 million and $500 million to end a quasi agreement that provided federal protection against potential losses on more than $100 billion in risky assets, according to The
Wall Street Journal
. Apparently the protection pact was never finalized so there has been some debate about whether Bank of America should have to pay anything for the "implied" protection, according to the Journal.
Who knows what other terms Bank of America may need to accept. I wouldn't be surprised if the Obama administration requires some kind of secrecy pact. That's been an all-too-common occurrence during the government's intervention, as I've noted in previous columns (
The one thing the Feds keep forgetting is that every time they squeeze a bank like BofA, it's the shareholders who get bruised.
--Written by Glenn Hall in New York.
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Glenn Hall is the New York-based Editor in Chief of
. Previously, he served as deputy editor and chief innovation officer at
The Orange County Register
and as a news manager at
in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at
in Fort Wayne, Ind. His work also has been published in a variety of newspapers including
The Wall Street Journal
The New York Times
International Herald Tribune
. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.