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| Politicians Asked Feds to Prop Up Ailing Bank |
| 2009-01-25 |
| Two Illinois congressmen urged the Treasury in October to avoid taking any regulatory action against a struggling bank in their state, illustrating the aggressive efforts some politicians are taking to help hometown lenders during the bank crisis. In a letter they sent, Democratic Reps. Danny K. Davis and Luis Gutierrez also asked government officials to provide financial aid to National Bank of Commerce, based in the Chicago suburb of Berkeley, Ill. Democratic Reps. Danny Davis and Luis Gutierrez wrote Treasury in late October asking the government to help a struggling bank in their state and halt any regulatory action against the lender. Regulators rebuffed the request, and the two-branch bank failed on Jan. 16. Lawmakers often seek to help home-state interests, and there is nothing illegal about forwarding requests to regulators and other government officials. But legislators normally stop short of action that might appear to be interfering in the way regulators examine and supervise banks, a process that is supposed to be impartial. Politicians' efforts to intervene on behalf of specific banks during the current crisis recall the savings and loan turmoil of the late 1980s, when members of Congress pressured the government to go easy on struggling thrift institutions. Among legislators who've tried to help a local bank get cash from the Troubled Asset Relief Program is one who had a lead role in drafting the TARP bill, Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. The bank he went to bat for ultimately did get TARP cash. |
| Posted by:Fred |