Banking Law

Taking TARP Takes a Toll

It appears that all those banks that didn't take TARP money and used that fact to publicly bash their brothers who did take TARP needn't have bothered to spend all those bucks on billboards. According to Rich Brose of Maritz Research in a recent interview on Fox Business News (a hat tip to "Tweeter" Abby Carr), the mere fact of taking TARP has cost TARP takers an average loss of 26% in customer trust over those competitors who resisted TARP's siren call.

According to Rich, Martiz's research shows a steep drop in overall trust of banks since last April. Especially hard hit by the "lack-of-trust factor" were those banks that received government assistance in the form of TARP's capital purchase program. Traditionally, the percentage of consumers who say that they trust their bank (as opposed to "the other guy's bank," I suppose) is in the 90s. The most recent surveys by Maritz show that the trust factor has fallen to 68% with respect to consumers whose banks haven't taken TARP, and to 42% among consumers whose banks stepped up to the plate and took a fastball in the face for Uncle Sam.

Another disturbing survey result concerns the percentage of those surveyed who thought that the US government ought to regulate executive compensation at all banks (not just those who received government assistance). That percentage is 53%. That means that for all the tough talk we hear by talk-show pundits who claim "the people" oppose "creeping socialism," there's a good indication that a majority (a slim majority, but a majority nonetheless) are ready and willing to see "leaping socialism" employed, as long as the recipients of that socialist control are banks.

As with so many of these surveys, you have to wonder what comes to the mind of the polled when the word "bank" is used. James Stewart in "It's A Wonderful Life"? Doubtful. More like Angelo Mazillo, would be my guess.

I love the way that one of the interviewers goes off on a rant about her bank (and she names it) "nickel-and-diming me to death" with a recent uptick in fees. That puts a personal spin on it that we can all enjoy and, after all, it's Fox News, so no one expects anything other than "fair and balanced," right? Even those of us who make out livings from serving banks like soulless slugs can sympathize with her irritation.

The rest of this week we'll be stuffing our pie holes and guzzling various harmful intoxicants, watching football, and generally making a slothful nuisance of ourselves, just like the rest of America. Enjoy the holiday, even if you're a vegan and wouldn't touch a Turducken with a ten-foot pole.

Full post as published by Bank Lawyers Blog on November 24, 2009 (boomark / email).