Not to be outdone by the other beleaguered banks, Wells Fargo C.E.O. John Stumpf announced yesterday that his company would pay off its own $25 billion debt to the government. This came hours after Citigroup C.E.O. Vikram Pandit said he was ready to get the government off his back.
“The stigma of TARP is becoming such an emotional, testosterone-driven thing that they want to be done with the government,” David H. Ellison, a portfolio manager, told the Times. “If Bank of America, if Citigroup can do it, then why not me, too?”
There was particular pressure on Wells Fargo, whose former C.E.O., Richard Kovacevich, once called the plan “asinine.”
“Is this America — when you do what your government asks you to do and then retroactively you also have additional conditions?” Kovacevich said in March. “If we were not forced to take the TARP money, we would have been able to raise private capital at that time.”
Is the rush to re-pay a good thing?
“The program was not meant to attach a scarlet letter to participating banks,” writes David Nason, who helped design TARP, in a guest column at Dealbook. Mr. Nason says there was a clause in the original plan that said banks were basically prohibited from paying back their bill for three years, which would presumably have presented all the worry and one-upsmanship about who was paying back when, and what it signaled to investors.