On second thought, never mind about that bailout

[CatWoman]

WASHINGTON — A small but growing number of community banks are backing out of the government's bailout, which they see as fraught with hidden strings and government interference.

About 20 banks so far that applied for or had been approved to receive about $1 billion combined in taxpayer money have reversed course in the past month and refused to take the money. That's just a fraction of the hundreds of billions of dollars the government already has spent, but it shows that taxpayers aren't the only ones anxious about the financial bailout.

"The government's going to own a good portion of these banks," said David Heintzman, president of Stock Yards Bank & Trust in Louisville, Ky. The bank recently turned down $43 million in approved bailout money.

After Congress approved the $700 billion bailout in October, the government gave banks only a few weeks to decide whether they wanted to take part in the government investment program. Many applied to get a foot in the door, in case predictions of an economic collapse came true.

"We drank the Kool-Aid," said Michael Ross, president of Fidelity Bank in Dearborn, Mich., which applied for about $29 million in November.

But as details emerged, the deal didn't look so good. For Fidelity, taking the money would mean the government would have owned about 25 percent of the company's outstanding stock. Then Congress and the White House could start calling the shots, Ross said. He remembers the government's failure overseeing Freddie Mac and its sister company, Fannie Mae, the two housing companies so badly mismanaged they were taken over by the Bush administration.

"These are the guys who brought you Hurricane Katrina. These are the guys who were supposed to be watching Fannie and Freddie," Ross said. "I've not seen anything like this, where they really are talking about nationalizing banks."

http://www.huffingtonpost.com/huff-wires/20090129/meltdown-no-thanks/

[BattyDem]

1. "they see as fraught with hidden strings and government interference"

So ... they just wanted the government to give them the money and walk away? No obligation; no questions asked.

Are those the same terms that are offered when these banks give loans?

Didn't think so. :eyes:

[Barack_America]

4. Basically. The whole "we can regulate ourselves better" BS.

Problem is they've been regulating themselves so well that they're now begging for money.

So much for that argument!

:rofl:

[Barack_America]

2. Wow. Somebody tell that guy that the administration changed on Jan. 20.

"These are the guys who brought you Hurricane Katrina. These are the guys who were supposed to be watching Fannie and Freddie," Ross said. "I've not seen anything like this, where they really are talking about nationalizing banks."

[spanone]

3. how (un) timely......this is new daily meme

[terisan]

5. One line jumped out at me-about govt being able to change contract at will

This banker is unwittingly describing the situation of people with credit card debt. Thecredit card issuer, with govt backing, has the power to change contract at will.

"Are you going to enter into a contract that will cost you millions of dollars if you can't live with the rules and you don't even know what the rules are?" said Steve Buster, CEO of Richmond, Calif.-based Mechanics Bank, which refused $60 million in bailout money. "I don't know of any other forum that parties can change the contract at will. This is not fair."



I would say these bankers are smart to walk away from the bailout money.

[bstender]

6. but you have the right to refuse

This banker is unwittingly describing the situation of people with credit card debt. Thecredit card issuer, with govt backing, has the power to change contract at will.

you can decline to accept the change and though your agreement/card is cancelled, you still pay it off under the former terms. it's fair enough for a revolving account it seems to me.

no idea about the TARP madness however, i wouldn't sign anything like that, that's for sure! (i doubt anything monetarily significant could be changed and be legal, but i'm no layer so i guess it is possible)