The money was 'paid back' by banks who got zero-interest loans from the Fed discount window. This way, they get to say "Hey, we paid back TARP", the Obama administration gets to say "The bailout wasn't a boondoggle", and the banks also borrow money from the government for free (from the discount window) and then loan it back to the government at 2% (by buying 10-year T-Bills.) Wholesale rate arbitrage for doing nothing. Must be nice to be "too big to fail".