Bank turns down money

California United, which is based in Encino and lends mostly to small and mid-sized businesses, has decided against taking $8.3 million from the feds, determining that the restrictions and costs would be more trouble than the money was worth. CEO David Rainer says the bank has plenty of capital. The new Congress is mulling over lots of restrictions on how the government money can be used - forced lending, restrictions on executive pay, etc. - so don't be surprised if more bank CEOs decide to say thanks but no thanks. From Bloomberg:

“The thrust of [Troubled Asset Relief Program funds] is that its use is going to be more restricted and going to be ultimately more expensive,” said Bert Ely, chief executive officer of banking industry consultant Ely & Co. in Alexandria, Virginia. “If you don’t need it, why take it?” Ely said that banks may have applied without any intent of accepting money simply to show their resilience. “What you are getting is an endorsement effect from the government by virtue of acceptance of TARP funding that you can use to tout your safety and your strength,” he said.