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Community One Bancorp, Bank of Carolinas Corporation Still Have Millions In TARP Funds

6:13 PM, Nov 21, 2013   |    comments
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GREENSBORO, N.C. - Five years ago, to bail out the struggling banking system, the Treasury Department gave $205 billion to banks through the Capital Purchase Program. That was part of the Troubled Assets Relief Program or TARP. Nothing said that money had to be returned. But the Treasury Department wanted to make money off these investments. And so far, they have. They've made more than $220 billion since some of those investments made money. But a document 2 Wants To Know found shows some banks - including two in our area - still have outstanding balances. That means they're losing money for you -- the taxpayer.

$64,679,000 - it's enough to pay for almost 2100 new teachers, or more than 9 million meals for Meals on Wheels, or the cost to build three miles of interstate. It's also how much two banks still have in outstanding balances.

A Treasury report to Congress details the Capitol Purchase Program. It says Community One Bancorp has the fourth highest remaining total nationwide at $51.5 million. And the Bank of the Carolinas Corporation still owes more than $13 million. These North Carolina-based banks are two of 97 banks in the nation with outstanding balances.

Wake Forest finance professor Rob Bliss says it's no surprise only smaller banks are still on the list.

"The small banks were given money more for political reasons and it was not a higher expectation for recovering that money," he said.

He also says the larger banks had an extra reason to repay - the Treasury's investments came with controls on how much executives could earn.

"But the smaller banks weren't paying their executives multiple millions of dollars, so it was less of a constraint," Bliss said.

Community One Bancorp declined to comment. But it did take the time to explain something. They said Treasury Department actually restructured the deal so Community One Bancorp could merge with another bank. Community One says that means the government is really only out about $30 million tax dollars instead of $51 million. We have not heard back by yet from the Bank of the Carolinas Corporation. We'll let you know when we do.

 

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