Saturday, April 11, 2009

Banksters cry about contracts

NYT finally publishes a well sourced article about the Obama administration's next moves on bailing out the banksters. Judging from the whining coming from the bankster's side, it appears I was probably right last week in thinking the White House wasn't so stupid as to set up obvious third party entities to allow the industry to dodge executive pay limits.

This article, that quotes Obama, suggests it won't quite that easy for the banksters to get around the rules. Not they won't try. It appears those that can, want to pay the TARP funds back early to avoid the pay limit. But of course they don't want to pay the penalities as prescribed by the contract and are whining about usury.
Douglas Leech, the founder and chief executive of Centra Bank, a small West Virginia bank that participated in the capital assistance program but returned the money after the government imposed new conditions, said he complained strongly about the Treasury Department’s decision to demand repayment of the warrants. That effectively raised the interest rate he paid on a $15 million loan to an annual rate of about 60 percent, he said.
Funny, that doesn't sound so different from what my bank did to me when I was one hour late, one time, in paying my credit card bill. Of course, no one knows how this will shake out in the end, but it's gratifying to see the banksters held to some measure of the same contractual standards as us "small enough to fail" folks, even if only temporarily.

[More posts daily at The Detroit News]

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