Northern Trust Corp returning $1.6billion in federal bailout loan

Northern Trust Corp. said last Friday that it would pay back $1.6 billion in federal bailout loan as quickly as possible.

Northern Trust came under fire last week for its lavish sponsorship of parties and concerts at a professional golf tournament.  It is alleged that the bank flew in hundreds of their clients and employees for a global marketing event that focused on showing appreciation for clients and attracting new business.

It is also alleged that the hundreds of employees and guests stayed at upscale hotels, and dined at very expensive restaurants and were treated with gifts from Tiffany.

In a letter to members of the U.S. House Financial Services Committee, the President and CEO of the bank, Frederick H. Waddell said, “We deeply regret that some of the events associated with the Northern Trust Open have distracted from the positive nature of an event that has raised more than $50 million for charity since its inception.  We will redouble our efforts to ensure that these activities are appropriate given the current environment.”

In a letter that was sent to the bank’s CEO, eighteen Democrats on the financial services panel told the banker, “We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events.”

“At a time when millions of homeowners are facing foreclosure, businesses and consumers are in dire need of credit, and the government is trying to keep financial institution, including yours, alive with billions in taxpayer funds, this behavior demonstrates extraordinary levels of irresponsibility and arrogance,” the Democrats wrote.

Unlike most financial institutions, Northern Trust has remained profitable.