August 24, 2009
"They Charged you $38 Billion in Fees, and Some Still Needed a Bailout"
Posted by Lisa Fairfax

This caption was part of a full page ad from USAA Bank in the Washington Post last week, and is part of a larger ad campaign emphasizing the fact that the bank did not take any TARP funds.  The ad went on to note that "We believe the only banks that can claim financial stability are ones like USAA that didn't take a dime in TARP funds."  In fact, the bank not only boasts of making a healthy profit in 2008, but also notes that it returned millions of dollars to its members through rebates and rewards.

The ad caught my eye because while obviously aimed at promoting the bank, it also suggest that there should be a stigma associated with banks that accepted TARP funds.  In some respects, this stigma may have been what the government sought to avoid when it convinced some of the more prominent banks to be the first participants in TARP.  Yet the ad plays on people's fears and frustrations not just about companies that needed a bailout, but also about the seemingly unfair fees and other practices in which some banks have engaged even after accepting TARP funds.  Interestingly, at least one Business Week article notes that while USAA did not take TARP funds, "it did benefit from federal guarantees established by the same legislation."  The ad nevertheless seems accurate given that USAA has not actually accepting any TARP money.  But is the ad working?  As I noted, it certainly caught my eye.  On the one hand, ads that play on our fears and concerns aboutthe bailout may be risky, particularly for those who would rather focus on the rosier stories suggesting that we are moving towards recovery.  On the other hand, the ad seems more appealing than those from banks touting the strength of their performance and programs post-bailout.

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