Regulatory System Allows Banks to Avoid iEnforcement »
Posted By Beau7890 11 months, 2 weeks ago in Business & Finance
At least 30 banks since 2000 have escaped federal regulatory action by walking away from their federal regulators and moving under state supervision, taking advantage of a long-standing system that allows banks to choose between federal and state oversight, according to a Washington Post review.
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nostalgia11 months, 2 weeks ago
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Seems to be one other way to wscape the Federal Regulatoes - have a powerful friend in Congress who can go around Federal regulators and get the bank TARP funds
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OneUnited sought Frank's help for TARP funds
Boston’s OneUnited Bank received $12 million in federal rescue funds last month just weeks after regulators issued a cease-and-desist order to overhaul some of its lending and executive compensation practices.
Details of the Federal Deposit Insurance Corp.’s official enforcement action against OneUnited and the bank's pending $12 million infusion were first reported Dec. 5 in a Page 1 article in the Boston Business Journal. The Wall Street Journal reported Thursday that the tiny bank received the bailout money after gaining influential support from Massachusetts congressman and House Financial Services Committee Chairman Barney Frank.
The funds came from the U.S. Treasury’s Troubled Asset Relief Program.
The FDIC’s cease-and-desist order said OneUnited must cut financial ties to a California-based limited liability company that owns a beachfront home in Santa Monica. OneUnited Chairman and CEO Kevin Cohee and his wife, Teri Williams, who also is the bank’s president, control the LLC, according to records with the California Secretary of State’s office.
The bank also pays for a Porsche for Cohee’s personal use.
Cohee and Williams are Chestnut Hill residents who rank as the bank’s largest common shareholders.
A recent depletion of OneUnited’s capital prompted regulators to conduct a top-to-bottom review of the bank’s expenses and operations, Cooper said. The FDIC described compensation to senior executives as “excessive.”
The FDIC action orders the bank to bolster capital, provide adequate supervision over bank officers and diversify its stock portfolio.
http://www.bizjournals.com/boston/stories/2009/01/...-
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nostalgia11 months, 2 weeks ago
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From a different source:
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Political Interference Seen in Bank Bailout Decisions
Barney Frank Goes to Bat for Lender, and It Gets an Infusion
Troubled OneUnited Bank in Boston didn't look much like a candidate for aid from the Treasury Department's bank bailout fund last fall.
The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use.
Nonetheless, in December OneUnited got a $12 million injection from the Treasury's Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee
Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection
http://online.wsj.com/article/SB123258284337504295...
Why bother with Federal regulators? Why not just go directly to members of Congress ubstead?
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