Banks with Execs on Regional Fed Boards More Likely to Get TARP Money, New Website Reveals
GAITHERSBURG, Md., May 4 /PRNewswire-USNewswire/ -- Banks that have a top executive serving as a regional Federal Reserve Bank director were nearly five times more likely to receive a TARP grant than other commercial banks, according to an exclusive analysis by FinCri Advisor, a new online publication and website about the financial crisis.
Consider the numbers: 40.5% of banks with a top executive serving on a Federal Reserve Bank board received TARP CPP grants compared to 8.3% of all eligible U.S. banks.
Banks whose CEOs serve on Fed boards in the East were more likely to get TARP money than those in the West, the analysis shows. No banks with representation on the Minneapolis, Kansas City or Dallas Fed Banks received TARP grants. But in the Boston region, 3 of 3 banks with execs on Fed boards got CPP grants. In the Richmond Fed, 5 of 7 such bankers got CPP grants. And in the Atlanta district, 7 of 12 got TARP grants, including two in Florida, where only 18 banks statewide got any TARP funding at all.
Seacoast Banking Corp. of Stuart, Fla. received $50 million in TARP CPP funds on Dec. 19th, the largest Treasury grant for any Florida bank. Yet three days before getting the bailout money, Seacoast entered into a formal written agreement with OCC to improve its asset quality, due to "unsafe and unsound banking practices."
Seacoast's Chairman and CEO Dennis S. Hudson III is a member of the board of directors of the Miami Branch of the Federal Reserve Branch of Atlanta.
Critics say the Treasury grants to the board directors' banks show "insider activity" with public money. But bank directors interviewed by FinCri say they had no influence on the process.
The new site, unveiled by specialty information publisher UCG, delivers independent journalism and legal advice to bank executives. In its 30 years, UCG has won more specialty journalism awards for its business content than any other niche publisher in America.
In its first month, FinCri Advisor also revealed that:
Bank regulators are increasingly using Individual Minimum Capital Ratio Letters against even well-capitalized banks, an enforcement tool that hasn't been used in years. (Read the IMCR story)
Treasury is requiring that banks who repay their TARP money prove that they can survive without the capital for at least two years. (Read the TARP repayment story).
