Bancorp Exec. Says Govt. Created TARP to Buy Weaker Banks, Not for Credit

"We were told to take it so that we could help Darwin synthesize the weaker banks and acquire those and put them under different leadership," he said. "We are not even allowed to mention that. ... We were supposed to say the TARP money was used for lending."
--U.S. Bancorp Chief Executive Richard Davis

There is no "A, R or P" in the government's Troubled Asset Relief Program, quipped U.S. Bancorp Chief Executive Richard Davis Tuesday morning in front of about 300 business people in Minneapolis, according to TwinCities.com.

"It's just troubled," the 50-year-old CEO said at the Thrivent Financial for Lutherans' Business Leaders Forum. The forum invites executives to discuss how business and their principles intersect.

Davis went on to say in his talk that while government officials marketed the program as a way to entice banks to lend again, TARP actually was designed to give solid banks like U.S. Bancorp some extra cash to buy weaker banks in the system. U.S. Bancorp did just that late last year when it acquired the assets of two failed banks in California, Downey Savings and Loan and PFF Bank & Trust.

"We were told to take it so that we could help Darwin synthesize the weaker banks and acquire those and put them under different leadership," he said. "We are not even allowed to mention that. ... We were supposed to say the TARP money was used for lending."

But Davis is talking about it now, he says, because he and others oppose current and future strings attached to the program. Davis didn't detail those strings, but he said he and some peers intend to voice their opinions to Washington, D.C., soon.

"Now they're punishing you for having the capital," he said, adding that he refuses to stand by and let his company become "collateral damage" in an attempt to nationalize the banks.

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