WASHINGTON — The Treasury Department announced Tuesday that 10 of the industry's largest institutions would pay back $68 billion in Troubled Asset Relief Program funds.
Although Treasury did not make it clear which companies would be returning Tarp, sources said the list was: Northern Trust, BB&T, Morgan Stanley, State Street, JPMorgan Chase & Co., US Bancorp, American Express, Capital One Financial Corp., Goldman Sachs, and Bank of New York Mellon.
In a press release, JPMorgan confirmed it had received permission to repay its $25 billion in Tarp funds.
"Paying back Tarp at this time is the right thing for JPMorgan Chase, and it's the right thing for our country," said Jamie Dimon, the company's chairman and chief executive.
Dimon said the company remains committed to "continued robust lending and to doing the right thing for the company's customers, communities, employees and shareholders."
The other companies were expected to follow shortly with their own announcements.
Though several smaller banking companies have already returned $2 billion to the Treasury, the announcement Tuesday marked the first high-profile firms allowed to repay Tarp. Several companies have agitated to return Tarp money since Congress began attaching additional conditions to the funds and the public grew outraged over bank bailouts. The recent results of stress tests gauging large banks' capital adequacy also suggested institutions no longer needed the government capital.
In the release, Treasury Secretary Tim Geithner said the repayments indicate a system rebound.
"These repayments are an encouraging sign of financial repair, but we still have work to do," he said.
The Treasury said last month that banks wishing to repay Tarp had to prove they could raise capital on their own and issue debt without government backing.
"For the first time in months, these banks have issued long-term debt that is not guarantee by the government," Treasury said.
Under agreements in the Capital Purchase Program — a piece of Tarp — companies that give back capital still retain the right to repurchase warrants that Treasury holds at fair market value, the government said. The 10 institutions have also paid a total of roughly $1.8 billion in dividends for the government's preferred shares over the last seven months.