The Troubled Assist Relief Program (TARP) was created in the wake of the 2008 financial crisis as an investment program to help stabilize the economy. There are 75 publicly-traded banks and thrifts that have still not paid back the bailouts they accepted from TARP, which translates to $4.68 billion in outstanding payments. There has been a spike in lenders repaying or enacting plans to repay their TARP funds as dividend payments are expected to increase from five percent to nine percent on the program’s fifth anniversary of participation.
"It hops up and that creates an incentive for them to get out. You really don't want to be paying that high dividend," said Ernie Patrikis, a partner at White & Case who previously served as general counsel of the New York Fed. However, despite the outstanding loans and fears that some banks may still be unable to do so, the Treasury has managed to make a profit on TARP's banking program. "The Treasury has made a pile of money. This is just the tail wagging the dog. These things will work out one way or another over time," said Patrikis.