Fate of ShoreBank rests in unanswered questions

The Chicago Sun-Times reports:

Last October, President Obama created a new program -- called the Community Development Capital Initiative -- to save banks, thrifts and credit unions committed to the mission of putting 60 percent of their lending into neighborhoods underserved by "traditional" financial institutions.

The program is an offshoot of TARP -- the federal Troubled Asset Relief Program -- President Bush pushed through in 2008 as the economy was collapsing.

ShoreBank applied for $75 million from the program, and a few weeks ago its executives thought they complied with what the regulators wanted: ShoreBank made management changes and rounded up $165 million from a group of Wall Street financial institutions -- JPMorgan Chase, Goldman Sachs, Citigroup and GE Capital.

The Treasury Department established a process where the applications of the community financial institutions such as ShoreBank are reviewed: a "council" made up of representatives from the Federal Deposit Insurance Corp., Comptroller, Office of Thrift Supervision and the Federal Reserve. ShoreBank must win approval from this "council" before its application can move to the Treasury for more scrutiny.

This sounds like the kind of council the late Mikhail Suslov would be on.