Leaders of smaller banks fume over bailout

WASHINGTON, Oct. 15 (UPI) -- Executives of smaller banks reacted angrily to a twist in the financial bailout package, seeing U.S. government equity purchases as punishment rather than help.

Stocks in financial firms soared on Wall Street on the news the plan was to divert $250 billion of the $700 billion package to buying shares of troubled banks.

But, two banking trade groups said only a few banks would volunteer for the program, The New York Times reported Wednesday.

"I'm not sure we've heard from any," said Karen Thomas of Independent Community Bankers of America.

The American Bankers Association said few would jump in, the Times reported.

"We don't need a bailout, and if other banks had run their banks like we ran our bank, they wouldn't have needed a bailout, either," Brady Adams, chief executive officer of Evergreen Federal Bank in Grants Pass, Ore., told the Times.

Chairman of Chain Bridge Bank Peter Fitzgerald said to the newspaper that he was "chagrined that we will be punished for behaving prudently."

The U.S. Treasury Department said troubled but salvageable banks would be pressed to take the deal, which gives the government preferred stock that pays 5 percent interest for five years and 9 percent for subsequent years if any balances remain.