$2 billion in TARP funds still outstanding, Many of 80 small banks in arrears are too weak to pay the penalty interest rate hike they'll soon face -WSJ

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2/5/14, "Small Banks Face TARP Hit, Wall St. Journal, By Saabira Chaudhuri, Michael Rapoport and Alan Zibel

"Small banks across the U.S are facing a crunchtime decision over federal aid received during the financial crisis: repay the funds soon or face a steeper interest-rate bill. While most banks that accepted government funds paid them back long ago, some 80 lenders still owe a total of roughly $2 billion disbursed under the U.S. Treasury’s Troubled Asset Relief Program. Under TARP rules, if the banks don’t reimburse taxpayers soon, they will face an increase in the quarterly dividend on the amount borrowed from the government. That dividend payment is set to rise to 9% of the loan balance outstanding from 5%, for some banks as early as the end of next week. The problem is that many of the banks in arrears are either too weak to pay the aid back or don’t want to trade in relatively cheap capital from the government for potentially unfriendly and expensive credit markets. Payback plans also require regulatory approval."...via dealbreaker.com, via zero hedge



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