23rd
Too Black to Fail?
I wasn’t at all surprised when I saw the following headline at WSJ.com: “Political Interference Seen in Bank Bailout Decisions”.
The story reads much as you might expect. Congressman lobby hard to ensure that money from the hastily implemented TARP program is routed to favorite banks. While precise economic criteria for government handouts might be lacking, and the worthiness of the recipient may be in doubt, finding that representative are funneling money to their constituents and favored interest groups is a virtual certainty.
I did however find this gem pertaining to OneUnited Bank in the articles closing paragraphs:
[Rep. Barney] Frank said he didn’t try to interfere with the regulatory process. “We have never told the regulators that they should ease up on them or not order them to do this or that,” he said.
He cites the bank’s status as the state’s only financial institution owned by African-Americans. “We did say, yes, I thought it would have been a social tragedy if the one minority bank in Massachusetts that has been working so hard and had been overextended into housing was to be wiped out by a federal action, the Fannie-Freddie preferred [shares] thing, and that’s why I think it was important to try to help them.”
And thus, a new category of distressed enterprises is created.
- k
