Bank of America Makes $402 Million TARP Dividend Payment

I am not sure if people know this, but the TARP money is repayable.

Bank of America made its first dividend payment to the U.S. government under the Troubled Asset Relief Program on February 17.

The payment totalling $402 million, reflects Bank of America's ongoing commitment to paying back U.S. taxpayers. This payment represents the dividend on the Fixed-Rate Cumulative Perpetual Preferred Stock issued in connection with the $45 billion in government investments that Bank of America received in late 2008 and early 2009.

"It is our intention to pay back these loans as soon as possible," said Bank of America Chairman and Chief Executive Officer Ken Lewis. "In the meantime, we are using these funds to support the U.S. economy by extending credit to individuals ans businesses."

Approximately $223 million of the dividend payment relates to the federal government;s $15 billion investment in Bank of America made under the Capital Purchase Program of the Troubled Asset Relief legislation and an additional $50 million relates to the federal government's $10 billion investment in Bank of America as part of the agreements to acquire Merrill Lynch & Co., Inc. The remaining $129 million stems from the government's $20 billion investment on January 16 to help facilitate the acquisition of Merrill Lynch. Total cash dividend payments to the government in 2009 will reach approximately $2.8 billion.

As previously reported, Bank of America extended more than $115 billion in new credit during the fourth quarter of 2008, of which about $49 billion was in commercial non-real estate; $45 billion was in mortgages, nearly $8 billion was in domestic card and unsecured consumer loans; nearly $7 billion was in commercial real estate; more than $5 billion was in home equity products, and approximately $2 billion was in consumer Dealer Financial Services.

I was so impressed hearing Bank of America was repaying their TARP funds. It reminded me of Russell Crowe in "Cinderella Man" repaying the money he had received when he was on welfare. Consumers should learn a lesson from this and realize that all debt-anything borrowed- is a loan and is meant to be repaid. No matter who you are. Pay your loans people.