TARP II (aka Son of TARP, TARP, Jr., TARP Lite, Tofu TARP, One-Horse TARP, and Diet TARP) is hardly out of the starting gate but is already down on the track with a broken ankle and looks like it might have to be eunthanized.
Several community bankers in the Tampa Bay area are saying “no thanks” to the proposal, and an investment banker questions whether the institutions that need the capital the most would qualify for the funding Obama is offering.
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Many bankers are hesitant to have the government involved in their business any more than it already is, said Paula Johannsen, managing director of The Carson Medlin Co., an investment banking firm in Tampa.
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“Unless the approval criteria is amended in some form, for most banks in the Tampa Bay area, TARP will remain out of bonds,” said Bill Short, president of Clearwater-based Old Harbor Bank.
The government can change the rules after a bank accepts TARP funding and that concerns many community bankers, said Jerry Campbell, chairman, president and CEO of HomeBanc in Tampa.
“If you are flat out desperate, you will take it. If you are not and you have another way around it, you’ll do everything to avoid taking it,” Campbell said.
This echos what we've heard from community bankers in other areas of the country. The most frequently heard cause of reluctance to take TARP, Jr. concerns the problem pinpointed by Jerry Campbell: the government changes the deal on you after you've signed on the dotted line. The federal government has proven itself to be as trustworthy in honoring the terms of a deal as a Capo in the Gambino crime family.
"A deal's a deal." Except when Uncle Sammy's your counterparty.
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