By Dave Jordan, NEWS 9
OKLAHOMA CITY -- Friday is the deadline for most banks to request federal bailout money, but two Oklahoma Banks refused any help from the government.
Bancfirst and the Bank of Oklahoma simply don't need the money, according to their balance sheet, but the threat of government regulation may have a played a part in their refusal.
It was the year of the domino effect, as banks like Indy Mac and Washington Mutual collapsed under the pressure of too much debt. It's a trend that Bancfirst and Bank of Oklahoma avoided by turning down federal bailout money.
"If you're drowning and you need a lifeline you grab onto this," said Oklahoma City University Economics Professor, Ron Shaw.
BancFirst claims it's a well-capitalized financial institution with capital ratios exceeding regulatory requirements. Bank of Oklahoma's CEO said the additional funds were unnecessary because its current capital levels are well above government requirements and we have access to additional private capital.
Shaw believes the move is good for both banks because the money isn't without conditions.
"This is not free money," Shaw said.
Under the terms of the bailout, the government wants a request a rate of return on its money, purchase stock in those institutions and even make the banks abide by government standards for executive compensation.
"The top about 6 people in the banking organization, the Fed will decide what they get paid," Shaw said.
Shaw said most of the banks in Oklahoma are in good financial shape, having learned the lesson of Penn Square back in the 1980, and said people shouldn't be surprised if more local institutions turned down that federal money.