Friday, March 11, 2011

FDIC finds no political influence in ShoreBank's attempted save

Before ShoreBank was taken over last year there were many who decried (even organized a tea party near the downtown offices of ShoreBank) whatever political connnection they had to survive. Not sure the FDIC's report would put a rest to those accusations. As weall know ShoreBank is now Urban Partnership Bank:
During the tortured effort to rescue failing South Side lender ShoreBank last year, Federal Deposit Insurance Corp. Chairman Sheila Bair called Wall Street banks soliciting investments in the bank, but a new report by the FDIC's inspector general concluded the intervention wasn't inappropriate.

The report, released Thursday, also disclosed that the estimated loss to the FDIC's insurance fund from ShoreBank's failure has grown substantially since its August failure. As of January, it stands at $452 million, up from the $329 million the FDIC announced when it closed the bank last year and sold the deposits and assets to newly formed Urban Partnership Bank.

The higher estimate was due to “asset recovery assumptions and liquidation information,” the report said.

The FDIC's inspector general was asked by Republican leaders on the House Financial Services Committee to look into whether there was undue political influence in the attempt to bail out ShoreBank, the $2.2-billion-asset bank that gained national renown for lending in low-income urban communities.

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