Federal Deposit Insurance Corporation (FDIC)

Did Green ShoreBank Escape Bankruptcy?

Submitted by Paul Chesser on Fri, 08/27/2010 - 16:49

Shorebank logoIt's been a week since the Federal Deposit Insurance Corporation swept away ShoreBank's bad assets (cost: $367.7 million), changed its name to Urban Partnership Bank, and left it largely in the hands of the same people (and investors) who ran it before. Since then there have been several articles that called the process and new arrangement "unusual." I guess institutions loved by two presidents call for special treatment.

Political Pressure Saved ShoreBank Management

Submitted by Paul Chesser on Tue, 08/24/2010 - 18:55

Geithner photoAmong other things, it looks like the Chicago lobbying to save ShoreBank paid off. Earlier this month I discovered a letter sent by Windy City power player and big Democrat donor Lester McKeever, Jr., to Treasury Secretary Timothy Geithner, which urged his intervention. "It is my hope," McKeever wrote, "and one shared by others who care deeply about its most vulnerable communities, that the ShoreBank recapitalization plan with investment coming from the U.S. Treasury will enable it to continue servicing its customers and fulfilling its mission."

FDIC Seizes ShoreBank; Installs Management in New Bank

Submitted by Paul Chesser on Mon, 08/23/2010 - 17:12

Shorebank logoOn Friday the Federal Deposit Insurance Corporation momentarily took over politically-connected ShoreBank, just long enough to relieve it of some of its woes and then turn it back over to the same people to continue its same failed mission. According to a press release, the FDIC Deposit Insurance Fund will take a $367.7 million hit in the transaction.

Can Chicago Lobbying Save ShoreBank?

Submitted by Paul Chesser on Thu, 08/05/2010 - 15:04

Shorebank logoProbably not. Seems like the more that presidentially-prized ShoreBank gets extensions from private financial institutions (Goldman Sachs, Citigroup, etc.) and from its federal regulators (the FDIC and Federal Reserve), the deeper in the hole it finds itself. Earlier this week the Chicago Tribune reported:

ShoreBank’s capital deficiency worsened in the second quarter, according to newly submitted financial results to regulators, and the Chicago-based lender now needs to raise at least $190 million just to meet targets set out in March by state and U.S. banking regulators….

Is ShoreBank Sheila Bair's Baby?

Submitted by Paul Chesser on Wed, 07/28/2010 - 15:27

Sheila BairThe deadline for ShoreBank to come up with sufficient outside capital has been extended again, with the Federal Reserve saying more than $150 million from the likes of Goldman Sachs and Citigroup and $75 million in TARP money aren’t enough to save the politically-connected community lender. Crain’s Chicago Business reports it’s the third extension the Wall Street firms have granted to enable ShoreBank to get its act together, with the new deadline August 6.

Dodd's Financial Services 'Reform' Would Mean More Bailouts

Submitted by Carl Horowitz on Thu, 03/25/2010 - 19:05

Sen. Christpher Dodd, D-Conn.The word "reform" in the age of Obama has taken on a clear meaning: aggressive expansion of government control over economic decision-making by businesses and consumers. The recently-passed health care bill, rammed through Congress via highly unorthodox parliamentary procedures, is evidence enough of that. Yet even supporters of new financial services reform legislation now before the full Senate may be hard-pressed to explain how the mammoth 1,336-page measure is supposed to improve efficiency and integrity in credit markets.

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