The Positive Local Impact of TARP

January 3, 2013

Authored by: Robert Klingler

On December 19, 2012, the recipient of smallest TARP CPP Investment repaid Treasury in full.   Freeport State Bank got $301,000 under the TARP Capital Purchase Program, and repaid in full, including $61,900 in dividends and ’s main bank rescue–the tiniest sum among the 707 institutions that signed up back in 2008 and 2009.  Speaking to the Wall Street Journal, the bank’s chairman and CEO, Leon Drouhard, explained the critical role TARP played in stabilizing the economy during the worst financial crisis since the Great Depression.

“[TARP] has been a very important thing and it has been a beneficial thing . . . It’s always referred to as a bailout but it was actually an investment in the financial system of the country as far as I’m concerned–and that investment turned out to be a good investment for the Treasury, and the country and the banks involved.”

If all bailouts were as profitable as the TARP CPP program, much less as necessary to stabilize the entire financial system, perhaps the term “bailout” wouldn’t have a negative connotation.