Over the next several days, Bank of America plans to repay its TARP money. Many financial institutions received preferential terms with TARP back at the height of the financial crisis. Now that things are starting to look better, though, many banks want to repay the TARP money. This is not terribly surprising, since the TARP help came with plenty of conditions.

One of those conditions was that banks had to submit to compensation restrictions. As a result, many institutions are chafing under the increased regulatory scrutiny. In order to move beyond the “pay czar“, Bank of America is willing to pay back the TARP funds and move on. One of the biggest factors in this decision, speculate some, is the fact that Ken Lewis is retiring at the end of this year, and they will need an attractive compensation package to lure a new CEO to the top position.

In the end, it is a valuable lesson: If you want more financial freedom, you should consider paying off your debt — as quickly as possible.