Say What, Bank of America?

The New York Times Square branch of Bank of America

Bank of America announced yesterday that they would begin to repay the $45 billion in bailout money they received from the government (which in turn came from us taxpayers), over the course of the next few days.

Bank of America on Bailout

It’s Bank of America’s motives for doing this that was the most uplifting thing about this piece of news for me. See, while they held that government money, Bank of America was subject to many regulations and restrictions, one of which being a cap on the pay of any CEO they may potentially hire.

Current Bank of America CEO, Ken Lewis

The result- they can’t find a CEO. Their current CEO will retire on December 31st, and they don’t have a replacement.

Bank of America believes that by repaying this money, they will be free of the government regulations, and that may help them find a CEO.

And it’s not like Bank of America just has the money lying around to do this either, in fact, they have to raise 18.8 billion dollars to pay off the government money in full.

What I’m Taking Away From This

Companies who have received TARP funds have a certain stigma about them. The American people and other business men and women want nothing to do with a company who in essence allowed the taxpayer to swoop in and save them.

Why else would their stock rise at this news? Because Bank of America is in a better financial situation than they used to be? Yes, they have recovered somewhat, but they’re still raising 18.8 billion to do this, and that’s not exactly a small amount of change.

My Prediction

 Soon after this government money is paid back in full, they will find another quality CEO, and not just because the deadline is looming larger every day.