Illinois first in failed banks

Illinois leads the nation in bank failures this year, though regulators say that is primarily because it has more banks than any other state.

The number doubled to 12 with the shutdown of six banks in two days last week. State and federal regulators said the Campbell Group, a family-operated holding company for all six, invested in the kind of risky mortgage-backed securities that brought down much larger financial institutions.

All the banks, which were spread from central to northern Illinois, were open Monday with new owners.

“They are a family-owned company. Six of their eight banks made some bad investments, while the other two made community loans, and they are doing fine. It’s the same type of loans that shut down AIG,” said Sue Hofer, spokeswoman for the Illinois Department of Finance and Professional Regulation.

The Federal Deposit Insurance Corp. estimated failure of the banks — based in Winchester, Clinton, Danville, Worth, Oregon and Elizabeth — would cost the deposit-insurance fund $267 million.

“They all followed a similar business model with a concentrated exposure in the same (investment) instruments,” FDIC spokesman Andrew Gray said Monday.

According to regulatory filings, the banks lost heavily on “collateralized mortgage obligations” — pools of mortgage-backed investments that federal regulators say contributed to the collapse of companies such as AIG and Lehman Brothers.

“The common thread in these banks, and not only in Illinois, but in Georgia, Texas and California, is the problems in their investment portfolio. They are the same problems we saw in the big banks,” said Todd Wise, president of United Community Bank of Chatham.

In many cases, said Wise, banks merely invested in the mortgage-backed products and were not directly involved in the loans.

The Chatham banking company is awaiting final regulatory approval to take over former Citizens National Bank branches in Carlinville and Bunker Hill. State regulators shut down Citizens National of Macomb in May.

Morton Community Bank, near Peoria, took over Citizens National and agreed to sell the Carlinville and Bunker Hill branches to UCB.

Word that First State Bank of Winchester had gone under spread quickly through the community about 50 miles west of Springfield, said lifelong resident and deputy clerk Barb Hoots.

According to the bank Web site, the bank was founded in 1867. The bank now is part of The First National Bank of Beardstown.

Illinois Bankers Association president and CEO Linda Koch said additional bank failures are likely, including in Illinois, as a result of the financial crisis that hit the country last fall.

But she pointed out the 52 bank failures nationwide compares to 745 institutions that failed during the savings-and-loan crisis in the 1980s and early ’90s.

“To people in the industry, it’s remarkable that there are just a little over 50 banks that have failed,” said Koch.

“It’s also important to remember no one has lost a penny of their insured deposits, and the transitions (to new owners) has gone very smoothly,” Koch added. “The majority of banks are well capitalized, and banks are certainly working very hard, and taking appropriate steps to address all the challenges.”

Koch said Illinois is home to 650 banks, twice as many as in the second-place state, Georgia. That’s because Illinois was among the last to allowed unrestricted branch banking in the early 1990s, she said.

I thought it was Kalifornia....

Subprime lobbyists in $370m battle

http://www.ft.com/cms/s/0/ab5cf9aa-39b7-11de-b82d-00144feabdc0.html?nclick_check=1

The top 25 US originators of subprime mortgages – the risky assets that sparked the global financial crisis – spent almost $370m in Washington over the past decade on lobbying and campaign donations as they tried to ward off tighter regulation of their industry, an investigation has shown...

Most of the top 25 originators, most of which are now bankrupt, were either owned or heavily financed by the nation’s largest banks, including Citigroup, Goldman Sachs, Wells Fargo, JPMorgan and Bank of America. Together, they originated $1,000BN in subprime mortgages in 2005-07 – almost three-quarters of the total...

The banks, which have received the vast bulk of the $700bn in troubled asset relief funds issued since last October, also supported the lobbying effort to prevent tighter regulation of the subprime market.

Nine of the top 10 lenders were in California, one of the states badly affected by the housing crisis that emerged after a surge in lending to riskier, or subprime, borrowers, many of whom were forced to foreclose.

At least eight of the top 10 were backed at least in part by banks that have received bank bail-out money...

Read more at ft.com ...

Banking problems in Illinois? Say it ain't so....

From the aricle at link above:

"Alexi Giannoulias—a "man who has long been dogged by charges that the bank his family owns helped finance a Chicago crime figure" and "who became Illinois state treasurer" in 2006 after Sen. Barack Obama (D-Ill.) "vouched for him"—"pledged to raise $100,000 for the senator's Oval Office bid," Charles Hurt reported September 5, 2007, in the New York Post.[1]

The September 5, 2007, Chicago fundraiser was omitted from Obama's public schedule and the event was closed to the press," Lynn Sweet of the Chicago Sun-Times reported.[2]

"Before he promised to raise funds for Obama, Giannoulias bankrolled Michael 'Jaws' Giorango, a Chicagoan twice convicted of bookmaking and promoting prostitution.

"Giannoulias is so tainted by reputed mob links that several top Illinois Dems, including the state's speaker of the House and party chairman, refused to endorse him even after he won the Democratic nomination with Obama's help.

"Giannoulias was the bank's vice president and chief loan officer for most of the more than $15 million in loans," Hurt wrote.[1] although "he was not charged with breaking any laws. The Obama campaign disputed any suggestion that Obama is tarnished by the association."

Obama and Giannoulias reportedly met on the basketball court "in the late 1990s ... at the East Bank Club, a luxurious spot in downtown Chicago," Jodi Kantor wrote June 1, 2007, in the New York Times.[3] Now, "thanks in part to [Obama's] backing, [Giannoulias] is now the Illinois state treasurer. Other regular gymmates include the president of the Cook County Board of Commissioners, the director of the Illinois Department of Public Health and several investment bankers who were early and energetic fund-raisers," Kantor wrote.

Additionally, it would appear that any concerns about the crime-related bank loans expressed by Obama in April 2006 had long blown over prior to the September 5, 2007, fundraiser."

Re -- Ilinois Governor's race...

Yes. Dillard is a combiner. He appeared in campaign ads for Obama last year and according to FTN (the Illinois equivalent of the American Conservative Union), Dillard had a pathetic 40% conservative rating last year. Total combiner. And he's from a "safe Republican" area in DuPage county!

Of the announced candidates for Governor, DuPage County Board Chairman Bob Schillerstrom and State Senator Kirk Dillard are fairly RINOish, Springfield Councilman Frank Edwards appears to be a drab moderate type, and Adam Andrzejewski, State Senator Bill Brady, State Senator Matt Murphy, and Dan Proft have a mostly conservative track record.

I am undecided for Governor, but I can't figure out why so many Illinois conservatives have flocked to Andrzejewski. Of the four conservatives, he undoubtedly has the LEAST impressive track record.

Brady was elected to both the state house and state Senate and served on the Illinois Commission on Pension Funding. He ran for Governor last time and finished in 3rd place ahead of the Gidwitz/Raushenberger ticket in the primary, when he was the only downstater and was outspent considerably by the other candidates (plus the Oberweis crowd constantly demonized him and claimed he was a Topinka planet). Matt Murphy became state senator by beating the well-funded RINO candidate of the GOP establishment, and then was one of the (very) few Republicans to win an open senate seat in Nov. 2006 when Dems were winning in a landslide everywhere. He previously served as a Trustee of the Greater Palatine Area and is a graduate of John Marshall Law School. Dan Proft has been well known in Illinois circles for 15 years as a top paid political consultant and was campaign manager for Pat O'Malley's insurgent campaign for Governor in 2002. He held an elected leadership post on the statewide Illinois Center Right Coalition. He won a huge upset in beating the Cicero machine in the last mayoral race and served as spokesman for Cicero under the new mayor. He founded Illinois Leader, the state equivalent of FreeRepublic, which was succeed by Illinois Review.

But Adam Andrzejewski? He's never been elected or appointed to any office and never even worked on any political campaign. His private sector experience? He ran a successful company that published yellow page directories (he's now resigned as CEO), and started a political organization last year that no one ever heard of til he started running for Governor ("For the Good of Illinois"), which he ALSO resigned from after a year.

And a bunch of Illinois freepers are flocking to this guy.

I don't get it. "He's right on the issues". So? If he was the ONLY conservative running I could see the point of taking a gamble on this guy. But if being "right on the issues" is the only criteria for holding high office, we might as well nominate Michael Savage for President.

When there are multiple conservatives in the race, I also judge a candidate's past campaign success, political leadership skills, and record in office. Adam is, without a doubt, the weakest of the four conservatives in all those categories. Isn't it a bit hypocritical of Illinois conservatives to ridicule Obama's qualifies for President ("community organizer", etc.), but rally around a guy nobody ever heard of, with zero political accomplishments, for Governor? Running a phone book company qualifies him to govern the fifth largest government in the state and affect the lives of 13 million people?

Even *I* have much more impressive political credentials than this guy, and I certainly wouldn't consider myself to be gubernatorial material.

Fieldmarshaldj recently mentioned Nikki Haley's thin political resume in the state legislature showed she's not ready to be SC Governor, and I agree, but even there you can see her political credentials are better than the guy Illinois freepers are going ga-ga over.

I must have talked with a dozen Illinois freepers convinced Adam Andrzejewski is the savior of Illinois conservatives. ::sigh:: Sometimes I think the conservative movement in Illinois is its own worst enemy. Why do conservatives here always seem hell bent against running solid, qualified candidates for high office?

>> I wish that a conservative, who has a lot of political experience (other than Brady) would run for governor, but that hasn’t happened. <<

Actually, that has happened. State Senator Matt Murphy has much more political experience than Adam (having won very tough primary AND general election campaigns in 2006). He was re-elected to second term as Senator in 2008, and he has said he is running for Governor.
http://illinoisreview.typepad.com/files/murphy-2010.pdf

>> I don’t think that Andrzejewski is our savior, but he’s the best candidate, in that race. <<

Spintreebob and Phil, how is Adam the "best candidate in the race" when he is clearly the LEAST experienced of the four conservatives running, and has no absolutely track record to back up his conservative platform? Do you agree with the Dems that Obama was the best candidate in the race, even though he less experience than any President in the last 100 years?

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.