How about the banks get charged interest on their TARP repayments. Interest like the banks themselves charge you and me if we're late with a credit card payment. Or if they do a pull on our credit reports and see that we are paying off balances on multiple cards. I mean... well, it's not like these banks don't owe other banks, right? Pot, meet kettle.
According to some balance sheet wordplay, the gov't has actually profited ($15 billion, if the linked article is to be believed - and this is due to dividends and interest) with the early repayments being made in haste in order to avoid limits on executive compensation. So... why not ramp that up a bit? If these guys can afford to reward mediocrity and bad business decisions handsomely, they obviously have the filthy lucre to afford it. Come to think of it, if they're able to pay up this money to avoid gov't regulating, it begs the question did they need the freaking bailout to begin with? Too obvious to answer, I know.
How about a flexible interest rate of 19.99% to 47.99% for TARP repayment, depending on the weather, depending on a bank's willingness to fund home loans at low fixed rates (eliminating ARM loans completely being one criterion), depending on a bank's willingness to put more of its 'toxic assets' (that's REO properties to you an' me) on the market priced to move and priced so that more people can afford them? And how about with some super low-interest 'home improvement' loan options? Many of those homes are trashed to hell and back, or in serious disrepair, and buying one of them is taking a humongoid chance in terms of serious repairs, spending time and money on un-fucking what a self-styled house-flipper did in haste, incorrectly, and on the cheap, etc.
Additionally, if a bank is tattled on for abusing overdraft charges, for raising minimum balances and/or changing terms for free accounts, for changing account terms on their customers for no good reason other than to nickel and dime, their TARP repayment interest shoots up to the 47.99% until they knock it off.
Just thinking aloud here.
(I got a nice note from BofA yesterday, stating that they would no longer engage in the dirty filthy despicable practice of applying payments to lower interest debt before applying it to higher interest debt. They also informed me that they won't be on such a hair-trigger with raising my APR if I have a late payment, but they still reserve their right to late fees. How grand of them to do the right thing on the interest. The only debt I have with them is my mortgage - after it passed through several lenders' hands, but I guess they were really hoping I'd do something like transfer a balance from another card, since they were so kind as to send me some 'convenience checks' the same day.
And then last night on the news, Citi was apparently sniveling about repayment and they're getting a tax-break? For fuck's sake...)