The hilarity never stops with these bankers. See, now that the taxpayers have bailed their sorry asses out of bankruptcy court, it turns out that they are, to use the NY Times’s words, “balking at the hefty premium they agreed to pay when they took the money.”
Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money…. Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans.
And this guy is a comic genius:
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.
“What they did is wrong and fundamentally un-American,” he said. “Even though the government told us to take this money to increase our lending, the extra charge meant we had less money to lend. It was the equivalent of a penalty for early withdrawal.”
Wrong and fundamentally un-American! What a maroon. Somebody call the WAAAAHHHmbulance for Mr. Leech.
The irony is unbearable, isn’t it? The financial crisis that necessitated this wretched bailout originated in mortgages with nasty features like variable interest rates and prepayment penalties. To fix the crisis, the banks took out taxpayer-funded loans that featured, essentially, variable interest rates and prepayment penalties.
And gosh, look at that! When those loan terms play out, the borrowers don’t like them! I hope some enterprising reporter asks Mr. Leech, and any other banker who’s moaning about the repayment terms, how accommodating they’ve been to their borrowers who’ve found themselves needing to renegotiate the terms of their mortgages.