MidSouth Bank’s first town meeting drew a crowd today with at least one person asking why the government hasn’t adequately accounted for TARP bailout funds. Bank President Rusty Cloutier says the U.S. Treasury Department’s program to fortify the nation’s banks comes with a clause in the agreement that “the government can change the rules at any time” so it can require better accounting if desired. “I already work for the government,” Cloutier says. “This is a highly regulated industry.”
MidSouth has grown substantially in the past 18 months and will use some of the TARP money to expand more through lending, Cloutier says. Critics have accused TARP recipients of using the capital to expand banks and improve sagging bottom lines instead of increasing lending to ease the credit freeze. Cloutier says he expects larger banks, struggling with toxic assets, will divest rather than grow this year. Despite growing public criticism of banks using TARP money to buy other banks, Cloutier says it mostly involves failed banks and is aimed at keeping depositors from losing money. It’s a sad situation, he says, because it leaves bank workers worrying about jobs and borrowers concerned about their loans being called. MidSouth Bank’s Baton Rouge meeting was the first of 14 town meetings planned in Louisiana and Texas. The meetings are designed to let small business owners know it is proactively lending money in order to stimulate the economy.—Anna Thibodeaux
