The federal government’s $700 billion Troubled Asset Relief Program (TARP) has recovered all but about $11 billion in the funds it distributed to US financial institutions in 2008 and 2009. Last week Regions Financial Corp. (NYSE: RF) and Zions Bancorp. (NASDAQ: ZION) demonstrated their ability to repay $3.5 billion and $1.4 billion, respectively, that they received under TARP.
That leaves about 360 institutions still owing that $11 billion to the federal government. Unfortunately, 143 of those institutions are unable to make their February TARP dividend payment. The worse news, for these banks, is that the dividend rate is set to rise from 5% to 9% beginning next January.
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