By Pete the Banker
Yesterday, Chicago based Community lender ShoreBank (here) thought they had been rescued from failure by a consortium of Wall Street firms including Goldman Sachs, JP Morgan Chase, Bank of America, and Citigroup. by Pete the Banker
CNBC reported that Goldman Sachs Chief Lloyd Blankfein was in discussions with Sheila Bair about helping the small bank in order to avoid a FDIC takeover of Shoreline (here). So why does this small Chicago Bank warrant the extraordinary attention of the Administration and the prominent New York Money Center Banks, especially Goldman which is plagued by a Justice Department and SEC investigations?
ShoreBank, which incidentally has a Portland Branch, has been praised by President Obama in the past for its efforts to lend in poorer neighborhoods and also for its “green” lending philosophy. Notably, Chairman Ronald Grzywinski of ShoreBank is one of the few Bankers in the country to testify before Congress in favor of the Community Reinvestment Act. Obama’s Senior Adviser, Valerie Jarrett has also has past connections with its Bank Directors on Chicago area Non-Profit Boards. Jarrett has denied any involvement in arranging the rescue effort. The White House is silent on any involvement in arranging or pressuring the New York Banks’ rescue efforts.
However Spencer Bachus, the ranking Republican on the House Financial Services Committee, is now investigating why the Wall Street Firms are being so generous with their offer. He is asking for or “all records of communication – including emails, phone logs and meeting records- related to the ShoreBank negotiations that exist between the Administration and representatives of ShoreBank, and executives of the banks involved in the bailout.” (here)
So why is ShoreBank any different than the other 150 small banks that have failed in the past year and a half? Is this rescue simply a coincidence or is there something nefarious about this proposed bail out?
Tell ’em where you saw it. Http://www.victoriataft.com
