Northern Trust, U.S. Bancorp haven't returned TARP funds

U.S. Bancorp and Northern Trust Corp. haven't returned funds obtained from the government's Troubled Asset Relief Program.

U.S. House Financial Services Committee Chairman Barney Frank said earlier today Northern Trust had repaid the government's $1.6 billion investment, and that Minneapolis-based U.S. Bancorp would return the $6.6 billion it received.

U.S. Bancorp, Minnesota's largest bank, hasn't filed a notice of redemption with the Treasury, bank spokesman Steve Dale said in an interview. Northern Trust hasn't returned TARP funds, said Steven Adamske, a spokesman for Frank. The Chicago-based lender has told the Federal Reserve "of its desire to begin the repayment process," bank spokesman Doug Holt said.

"Northern Trust has not returned the money, we understand that," said Adamske. He said Frank took at "face value" a Feb. 27 letter Northern Trust sent to Congress that said the lender had engaged "regulators with the goal of repaying Capital Purchase Program funds as quickly as prudently possible."

Northern Trust expects its request to the Fed "will lead to consultations between Northern Trust, the Federal Reserve Board and the U.S. Department of the Treasury as outlined under the American Recovery and Reinvestment Act of 2009," Holt said in an e-mail. U.S. Bancorp also has said it plans to redeem the Treasury's preferred stock "as soon as prudently possible."

U.S. Bancorp fell $2 to $9.01 at 4:15 p.m. in New York Stock Exchange composite trading and Northern Trust tumbled $4.43 to $48.64 on the Nasdaq Stock Market.

Lenders including Bank of America Corp. and Goldman Sachs Group Inc. have said they want to return money from the government's TARP program to escape federal curbs on their activities. More than 500 banks, insurers and credit-card companies applied for TARP capital and the government has distributed almost $300 billion in funding.