The Wall Street Journal reports:
Goldman Sachs Group Inc. has jumped into an effort to save a Chicago bank whose efforts to expand lending in poor communities have high-profile supporters in Washington and Chicago.
Goldman Chief Executive Lloyd Blankfein has discussed the Wall Street bank making an investment in ShoreBank Corp. with Federal Deposit Insurance Corp. Chairman Sheila Bair, according to people familiar with the situation. He has also telephoned other bank executives as ShoreBank tries to raise $125 million it needs to forestall a possible takeover by the FDIC, people familiar with the discussions say.
Do you find it strange that Goldman wants to "help" a politically connected Chicago institution? Here's Jan Schakowsky , in Februrary, on bailing out
ShoreBank:
“The community banks and credit unions have been historically well managed. They did not create the problems in financial markets, but they are left cleaning up the mess created by unscrupulous predatory lenders,” said Rep. Schakowsky. “Often, predatory lenders targeted their neighborhoods because of the economic and racial composition of residents – it is a tragic story that has played out throughout our country.”
ShoreBank, in Chicago, is one institution that could benefit from the program and use the funding to help local economic recovery. currently under-capitalized and must raise significant amounts of capital to continue their work that benefits communities. It is a perfect example of the type of quality institution that this policy will help. ShoreBank lends in the neighborhoods most abused by bad lending. Many of the neighborhoods they serve have foreclosure rates upwards of five percent and have experienced home price declines between 20 and 40 percent. Meanwhile, the average unemployment rate is double that of Chicago.
When you hear Chicago politicians, bad loans, and Goldman Sachs: hold on to your pocketbook.
