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How do I know if my bank has a TARP covering its roof?


AP Photo / Matt Rourke

I've noticed a rash of advertisements and billboards from banks touting their ability to stay financially healthy without bailout money from the government. One bank in Massachusetts is even handing out bumper stickers that say "Don't blame me, I bank locally". This led me to wonder if my bank had taken any of the bail out money from the Troubled Asset Relief Program (TARP) and if they had, had they paid any of it back yet?

The government maintains a web site chronicling its actions on the road to financial stability. This web site is the source of information for TARP loans, and it is updated regularly.

After reviewing the list, I found only three banks in Central Connecticut who had participated in the program:

Webster Bank, Waterbury

CBT, Hartford

Simsbury Bank, Simsbury

The small number may be because many of the banks and credit unions in our area are community and regional banks or credit unions who traditionally are more prudent with their lending practices, and take a conservative approach to doing business.

And with the recent announcement that Bank of America is paying back some of its bailout monies, and reported gains for the government from recent repayments, there's been a revised interest in the TARP program and its success.

At this point in the game with banks repaying funds the government is ahead. However, it is too soon to know whether or not the US will come out as the winner in the end. Some estimates indicate we could be looking at another 150-300 bank failures. If that happens, many banks may not repay, and that would certainly deplete any early gains.

The good news is that the ABA recently announced that more than 80 percent of banks receiving Capital Purchase Program funds indicated the capital infusion kept them lending despite the recession. The survey also showed that some institutions had used the funds to absorb unanticipated losses, helping to keep them whole.

For more information on the program in general, visit the Financial Stability website.