Posts Tagged: ShoreBank

IG: Obama did nothing wrong with ShoreBank

Here is one Republican investigation of Barack Obama that may have hit a dead end. The Obama administration did not inappropriately try to save erstwhile Chicago community lender ShoreBank, concludes an FDIC inspector general report. Steve Daniels of Crain’s Chicago Business summarizes the report, requested by House Republicans who were suspicious that Barack Obama called on Wall Street giants to bail out a bank in the president’s former backyard. FDIC Chairman Sheila Bair, in fact, did call Wall Street firms but the “calls were motivated by reducing the potential losses to the FDIC’s insurance fund rather than any political favoritism.”

FDIC released a report last week on the irresponsible mortgage lending that lead to ShoreBank’s demise. The company’s remaining assets were merged into Chicago-based Urban Partnership Bank.

A community lender by any other name

As had been anticipated for weeks, the FDIC seized Chicago’s ShoreBank Friday evening. The South Side community lender lost hundreds of millions in the subprime mortgage crisis. More surprising is that ShoreBank will be revamped as Urban Partnership Bank. (more…)

Chicago housing experts: Let’s rent for now

Paul Merrion of Crain’s Chicago Business reports that at the recent Treasury/HUD housing finance conference, the Chicago delegation wanted to talk about renting. Ellen Seidman of Chicago’s ShoreBank (which may be taken over by the FDIC at any moment) and Michael Stegman of the MacArthur Foundation discussed how the government favors home ownership over renting. Seidman argued that quasi-government institutions Fannie Mae and Freddie Mac, both still in Treasury Dept. conservatorship, should start to support the rental market. (more…)

More bank failures in Illinois

Another week, another Illinois bank put into FDIC receivership. Late last Friday, the Federal Deposit Insurance Corporation took over Palos Bank and Trust Co., in the southwest Chicago suburb of Palos Heights. The Associated Press reports that First Midwest Bank of Itasca, Illinois will take over the bank’s $467 million in assets and share losses with the FDIC on $343 million in debt. The FDIC takeover comes a week after the feds seized Chicago’s Ravenswood Bank and also arrives amid talk that prominent Chicago lender ShoreBank will fail. Nationally, the FDIC has taken control of 110 banks this year compared to 77 at this time last year. Illinois alone has seen 14 bank failures in 2010.

The AP has an interesting explanation for the increase in bank takeovers: (more…)

Winding down ShoreBank

The saga of Chicago’s ShoreBank is drawing to a close – despite the support of major Wall Street firms and perhaps President Obama, the community lender will likely go into FDIC receivership. Steve Daniels of Crain’s Chicago Business reports that “there are two probable scenarios” for the bank: (more…)

Looks like FDIC is in ShoreBank’s future

Chicago-based ShoreBank may be a goner after it lost at its attempt to get $75 million of Treasury Dept. TARP money. James Sterngold and Robert Schmidt of Bloomberg News explain that the bank applied to a TARP bailout program for community banks that invest in poor areas. Indeed, the case for saving ShoreBank revolved around its investment in Chicago’s South Side as well as (more…)

Drifting away from shore

ShoreBank, a community lender on Chicago’s South Side, is in bigger trouble than first thought – and the Obama administration may now let the bank fail.  The Chicago Tribune’s Becky Yerak reports that ShoreBank must raise at least $190 million in order to qualify for a $75 million Treasury Dept. TARP loan. Banking regulators arrived at the $190 million number after an awful 2nd quarter for the lender. Previously, the Treasury Dept. estimated that ShoreBank needed to come up with (more…)

ShoreBank still lost at sea

Steve Daniels of Crain’s Chicago Business caught this at the close of business Friday: the federal rescue of Chicago’s ShoreBank has been postponed for at least another three weeks. The distressed community lender made national headlines in May when Wall Street titans including Goldman Sachs and Bank of America pledged $150 million to prevent an FDIC takeover. The Treasury Dept. was then expected to chip in $75 million of TARP funds, and with the combined $225 billion Shore Bank would be back on its feet. But the Federal Reserve has advised Treasury that ShoreBank needs more than $225 million (it’s not clear how much more) — hence the delay in TARP money.

There is some justice in big banks that received multi-billion TARP bailouts helping out smaller banks that weren’t immediately rescued by the Treasury Dept. (more…)

Congress kills TARP…long live TARP

In order to pay for financial regulatory reform, Congress transferred what funds remain from the Troubled Asset Relief Program a/k/a TARP (a/k/a the $700 billion bailout of Wall Street marked by its unpopularity — and success in stabilizing the financial market). Paul Merrion of Crain’s Chicago Business reports that this is unlikely to affect banks that have applied for TARP money, such as Chicago’s ShoreBank. (more…)

ShoreBank needs to pass hat again

Is a prominent Chicago bank suddenly careening towards FDIC receivership? Lorene Yue of Crain’s Chicago Business reports that ShoreBank, with headquarters on Chicago’s South Side, must raise $300 million in order to avoid a federal takeover.

It had first been reported that ShoreBank cobbled together enough money to stay in business. (more…)