Both Hank Paulson and President Bush said they were put in conservatorship to ensure the liquidity of the financial system. This was done by forcing them to purchase bad loans made by TBTF banks at $20 billion each, monthly. This was the main reason for their "bailout". Outside conservatorship, they would have only purchased loans that met their quality standards and within their means. According to their regulator James Lockhart, they had $95 billion in capital in July 2008.
Although I disagree with many of Carlos' statements, he is absolutely right that they shouldn't pay any interest to the Treasury for the bailout they never needed.
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