Out from under TARP: U.S. nears OK on big-bank paybacks

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Some of the biggest U.S. banks could get approval as early as Tuesday to repay their federal capital injections.

Goldman Sachs Group, American Express Co. and JPMorgan Chase & Co. are among the major banks that have said they want to return billions of dollars in government money received under the Troubled Asset Relief Program last fall.

The Treasury may approve the repayments Tuesday, the Wall Street Journal is reporting on its website.

The Federal Reserve slowed the repayment process last week when it demanded that banks show they could raise money via public stock sales. That requirement applied even to Goldman, American Express, JPMorgan and other firms that had passed the government’s ‘stress test’ in May without being required to raise fresh capital.

Getting out from under TARP would free banks from restrictions imposed by the program, including limits on executive compensation and dividend payments.

Twenty smaller banks already have repaid $1.8 billion of TARP money, according to a running tally by bank research firm Keefe Bruyette & Woods Inc. That group includes Alliance Financial of Syracuse, N.Y., TCF Financial of Wayzata, Minn., and Bank of Marin Bancorp of Corte Madera, Calif.

Separately on Monday, the Fed approved the capital-raising plans of 10 big banks that came up short under the stress test.

-- Tom Petruno