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.Presumably “Darwin” is Davis’ nickname for Bush Treasury Secretary Henry Paulson.
“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.”
US Bancorp, the Minneapolis-based parent of US Bank, announced a “capital infusion” of nearly $7 billion from the TARP in November.
In the same story Davis is quoted as boasting that US Bancorp is “a strong player in a weak industry” because “We didn’t get into the stupid stuff two years ago that would have impaired us from doing the normal stuff today. So there.”
“Stupid stuff” presumably refers to excessive, badly underwritten subprime lending leading to defaults and foreclosures. The article doesn’t say whether Mr. Davis mentioned or explained his bank being listed as the plaintiff in one out of every twelve foreclosure sales in Cuyahoga County in the last five years. (That’s over 2,600 US Bank sheriff’s sales in the county — 1,600 in the city of Cleveland alone.)
(h/t Calculated Risk commenter crispycole)
