Washington bank repays TARP

10/19/2011

Spokane-based Washington Trust Bank, which accepted Trouble Asset Relief Program funds in January 2009 as a defensive mechanism, recently repaid its obligation to the U.S. Treasury Department, the Spokesman-Review reports.

WTB had taken a $110 million TARP loan two years ago, "as insurance against the horrendous economic uncertainty," bank president Jack Heath told the news source. However, the bank survived the tough economic times. Heath added that "In the end, we were very fortunate."

As the process for TARP repayment moved along, Heath also made a late application to the federal Small Business Lending Fund. The SBLF accepted the bank's request and provided it with $89.1 million to help increase business across the Northwest.

The use of SBLF funds to pay back TARP loans has been a topic of contention since the end of the SBLF's lending period in late September. Bloomberg Businessweek notes that of the approximately $4 billion provided to banks through the fund, an estimated $2.2 million was used strictly to pay back TARP loans instead of being distributed to small businesses.

According to data from SNL Financial, 279 of the 707 financial institutions that received TARP money have repaid at least a portion of their debt.