Big Banks Escape TARP But "We've Left Our American People Behind," Lynn Tilton Says
By Peter Gorenstein

December 15, 2009

Link to Yahoo Finance

Add Wells Fargo to the list of banks repaying their TARP loans. It's another indicator the banking system is on the road to recovery -- or at least in better shape than this time last year. Of course, that's thanks to Treasury programs like TARP and dozens of other Fed programs that kept the money flowing when bankers closed their taps.

It's the rest of the economy that really needs fixing, says Lynn Tilton, CEO of Patriarch Partners, a private equity firm with over $7 billion of assets and investments in over 70 companies. "We've left our small and mid-sized businesses behind; and we've left our American people behind," she tells Aaron in the accompanying clip. "This does not an economy make."

The government "should never have allowed TARP funds to go out without any mandate to lend," Tilton declares.

Can it be fixed?

With some incentive from the government, Tilton is confident more firms like hers will do more "high risk, high reward" lending. (To that end, Tilton has a detailed plan to get the private sector lending which we discuss in an forthcoming clip.)

In the meantime, President Obama is trying to nudge banks in the right direction, at least on the surface - talking the talk on "60 Minutes" and meeting with America's top bankers on Monday, where the CEOs were prodded to:

At the meeting, US Bancorp said it would take a second look at loans they already rejected while Bank of America pledged to lend $5 billion more to small- and mid-sized businesses in 2010 vs. 2009, The AP reports.

Some rhetorical progress, perhaps, but little tangible comfort for the millions of unemployed.

To read Lynn Tilton's bio click here About Lynn Tilton

Follow Lynn Tilton on Twitter at www.twitter.com/lynntilton

Watch video at SME Rescue Loans Youtube Channel