Remember how George Bush, Henry Paulson and other supporters of the $700-billion bailout for banks swore up and down how the taxpayer money was desperately needed so that banks could lend money to main street Americans?
Well, it now appears that's not what the money was really for at all.
The Bush Administration just handed Umpqua Bank, one of the Northwestâ€™s largest financial institutions, $214 million in taxpayer bailout cash.
But as the Oregonian reports :
Umpqua is already well-capitalized, raising questions about whether the institution needed the federal money. "The bottom line is, we probably don't," said Ray Davis, president and CEO of Umpqua Holdings.. Umpqua's Davis said it made sense to accept the money, which will come in handy if the bank decides to buy out a competitor.
The Register-Guard similarly reports :
â€œWe can use it for pretty much anything,â€ Chief Financial Officer Ron Farnsworth said. â€œIf we need it for lending, we can use it for lending. We donâ€™t need it for that â€” we have plenty of money for lending (from) deposits. We look at it as an opportunity for increasing our footprint.â€ What the Treasury is trying to do, Farnsworth said, â€œis drive consolidation. They want to see the stronger banks acquire the weaker ones.â€
So Umpqua doesnâ€™t need the bailout money for lending and wonâ€™t use it for that. What it will do is use the taxpayer money to consume smaller competitors, causing big layoffs and making itself too big to fail so Umpqua can then get, you guessed it, more bailouts.
A few years ago environmentalists called for a boycott of Umpqua because some of its biggest owners were old-growth timber barons. After the $214 million taxpayer bailout was announced, those timber baronsâ€™ Umpqua stock rose more than 20 percent.