This is a rush transcript from "Your World With Neil Cavuto," April 22, 2009. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: All right, well, no strings attached. If the White House won’t let bailed-out banks repay TARP funds immediately, my next guest says he will, Senator Jim DeMint, a Republican from South Carolina.
Senator, good to have you.
SEN. JIM DEMINT (R), SOUTH CAROLINA: Hey, Neil.
CAVUTO: What is the real story with — with this? Do they, will they want to pay immediately? What — what is the real story there?
DEMINT: Well, Neil, you know, last week, about a million Americans took to the streets to complain about the spending, the bailouts.
And, as we look at what is happening with these bank bailouts, the special inspector this week said it was ripe for fraud and waste and corruption. And it is not working. Sixteen of the 19 banks that took the most TARP money are lending — are lending less than they did last October.
So, we want to help a lot of these banks, particularly community banks, who were forced to take this TARP money, who now want to get out of it.
And, so, one of the amendments we’re offering to a bill that is going through this week — it will be offered by David Vitter — will just be to allow banks, if they are properly capitalized, to give this TARP money back and get the feds out of their — their banks, and let them run their own business.
I am also offering an amendment that would forbid the government from translating or turning the loans into common stock, which would make the government an owner in all of these banks.
So, the government is — has not done what it said it would do, Neil, but it keeps taking more and more steps to get more control and ownership. And we are just trying to say, hey, enough is enough. Let’s get out of this. It’s not working.
CAVUTO: Yes, but what — what, if, Senator, the companies, these banks, might be hoodwinking you, right? They might be using the excuse, oh, we would love to give the money back. We just can’t.
And I have talked to a number of midsize banks who have been on with me at FOX Business Network.
By the way, Senator, if you don’t get FBN, you really should demand it.
CAVUTO: But what they pointed out to me was, look, we found a way to give it back.
Now, to be fair, a lot of them didn’t owe the — the $20 billion, $30 billion gargantuan sums of a Citigroup or what have you. But a couple of them did owe a couple of billion, and they gave it back.
Now, so, do you think they are using this as an excuse, some?
DEMINT: No. I mean, some can get waivers, but it is done on a — just on an exception basis now, and it is drawn out.
There are a lot of banks who tell me that they were essentially coerced or forced into taking this, and now that they see the implications of the government being more involved in their business, and it is actually hurting their ability to — to make loans, and they...
CAVUTO: But you know what? That’s another point, Senator. I keep jumping on you, my friend.
CAVUTO: But, you know, they say coerced. I mean, no — no one is forcing that Napoleon or cannoli down my throat. You know what I’m saying?
CAVUTO: I — I do it.
So, they had a choice in the very beginning, do we take this money or not? Well, there might have been subtle pressure. Well, all your competitors are, so you’re going to be at a disadvantage if you don’t.
But do you really think that the government came to them, whether under a Republican president or a Democratic one, and said, you either take this, or you are dead?
DEMINT: Well, they did not say it that way, but the Treasury and the Federal Reserve have a lot of control over banks.
And when your regulator comes in and tells you need to do something, and you don’t do it, the banks wonder what is going to happen after that. So, they were pressured — let’s just put it that way —
CAVUTO: I see.
DEMINT: ... into taking this money. So, I think they’re...
CAVUTO: And you’re trying to release that grip, trying to make it easier, so they can give it back.
It would be a pickle if they don’t, right, that, after all this, you did — you worked on their behalf and the taxpayers’ behalf, and then it turns out, well, you know, we might hang on to this a while?
DEMINT: Well, they have to be well-capitalized. They have to be in a good position.
DEMINT: But — but we need to start devolving our way out of this, instead of what the administration is doing, is taking us deeper and deeper. They’re getting ready to ask for more TARP money, or trying to convert it to common stock.
This has just gone past the line of what the government should do. And we want to try to restore some free-market principles here and get the economy going again.
CAVUTO: All right, Senator, thank you very much.
DEMINT: Thank you, Neil.
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