Did the Obama administration cause the failure of a New Mexico bank?

posted at 12:15 pm on January 24, 2010 by Ed Morrissey

Federal regulators seized Charter Bank in New Mexico this week as its capitalization fell below requirements, making it the latest of scores of banks to have failed in the economic crisis.  However, the Albuquerque Journal reports that Charter faced a very low default rate on residential loans and no commercial failures, either — until the Office of Thrift Supervision, its regulator, demanded that Charter increase its declared risk fivefold (hat tip HA reader Super5):

Federal authorities on Friday closed Charter Bank, a closely held, family-run financial institution known for its financing of low-income housing in New Mexico and for the philanthropy of its owners. …

Last fall, Office of Thrift Supervision examiners, responding to the national collapse of real estate development, ordered Charter to increase its allowance for loan losses from $10.8 million to $55.4 million, even though Charter had no delinquent commercial construction loans and only [0].34 percent of the loans in its commercial real estate portfolio were behind on their payments. That order reduced the level of capital Charter had on its books.

Last Wednesday, OTS ordered Charter to find new capital as a buffer against insolvency or face closure.

Charter had hoped to find a buyer, but none appeared. The owners’ stake in the company was wiped out by the forced closure.

How involved were they in low-income lending?  The head of New Mexico’s MFA makes it clear:

Charter became a major real estate lender and was especially active in underwriting and servicing mortgages for low-income housing. It worked closely with the Mortgage Finance Authority, which was established by the State Legislature to help finance low-income housing construction. According to MFA executive director Jay Czar, Charter services about 95 percent of the mortgages issued through the agency.

“They are just class bankers,” Czar said. “These are guys who quite frankly really look out for the state of New Mexico. They do business larger banks wouldn’t even consider.”

What triggered the OTS action? Reporter Winthrop Quigley followed up in today’s edition:

Charter’s management, led since 2001 by bank President Glenn Wertheim, insisted that loans, mostly commercial real estate loans — which OTS said were troubled — were, in fact, being paid on time. OTS disagreed and ordered tens of millions of dollars of those loans to be classified as toxic.

That classification, recorded as an entry on the bank’s balance sheet, on paper lowered Charter’s capital (money regulators require banks to make sure their deposits are safe) to levels well below those regulators regard as sound, even though virtually all of Charter’s commercial real estate borrowers continued to pay their bills on time.

Something sounds extremely fishy in Albuquerque.  If the loans were getting paid on time, why did OTS demand that Charter increase its declared risk-hedging last fall? A 99.66% rate seems pretty good to me.

This looks very suspicious, as if OTS either wanted to keep conducting social engineering despite the ruination it caused, or more maliciously wanted to redistribute Charter Bank to other owners.  Perhaps reporters from other national media outlets will take the time to contact Winthrop Quigley and shine a little more light on Charter’s seizure.

Update: On second look, it seems like a flat-out disagreement on what constituted risk in the commercial lending system, and not an order to increase risky lending, as I had originally thought.  The earlier order did not intend to force Charter to assume more risk, but to put more risk on its books than was warranted, reducing their capitalization.  I’ve edited the post above to recast the article in those terms.  The OTS still appears to have shut down a bank despite the fact that its loans were working properly (99.66% of all commercial loans paying on time) for reasons that don’t really seem to have much to do with an actual risk of collapse on Charter’s side.

And please still note that Charter took those low-income-loan risks to meet federal and state regulators’ expectations of community service — and they got repaid with what clearly looks like a premature seizure.  It’s still a damned-if-you-do, damned-if-you-don’t scenario for Charter.

Update II: For an administration supposedly working to correct the rise of “too big to fail” financial institutions, their OTS doesn’t seem to have a problem forcing banking consolidations as happened this week in New Mexico.

Update III: Longtime reader The Banking Guy says there’s probably less to this than thought:

I work at a (big) bank, and have done so for 25 years.  I don’t know the bank in New Mexico, or any of the details of this situation beyond your post.  However, my 25 years give me reason to think that this is just standard banking regulation with no political overtones.  Here’s why (with lot’s of simplifying assumptions, for clarity).

Many banks, particularly small ones, have huge bets on the real estate markets, whether residential, residential construction, or commercial property, or all of the above.  It sounds like this bank was one such bank.  Assuming that this bank has an outsized commercial real estate portfolio, I can see that it might have a terribly risky loan book, even though less than 1% of the loans are past due (which I admit is typically very good).

For simplicity’s sake, let’s assume that the bank had one loan, a $1MM construction loan on a commercial property.  Let’s further assume that the property is under construction, with an “interest reserve” to pay the current loan interest during the construction period, so that the loan is indeed current.  Let’s further assume that the property had a tenant lined up to move in at completion, and that the property appraised on an “as completed” basis for $1.25MM at loan inception.  All that sounds good.

Now fast forward to today.  Let’s assume that that the tenant is bankrupt and won’t move in.  Let’s also assume that the property now appraises in a horrible market for $800M (and that both appraisals were “accurate”–that is, the best possible reflection of values at the time that they were done).  So the loan is current, but the prospects that it will continue to be current are very low, because once the interest reserve is depleted there is no cash flow to pay the loan at all.  So the loan is “Classified” by regulatory definition, and quite likely will require a charge off that would probably be $200M (the current loan amount less the current appraisal).  Now if this bank had $100M in capital, or 10% of its loans, that would be very high (i.e., good) for a bank.  But it would also be inadequate by $100M to even keep the bank’s capital at break even (which is itself of course way too low).

Now, this is a greatly oversimplified example. But replicate that loan in the portfolio of a real small (or large) bank, and add in, for example, a similar loan for a property to be “built on spec,” with no tenants lined up.  What seemed (clearly incorrectly in hindsight, or even with forethought but that’s a different post) to be a reasonable assumption on leasing at the time of origination doesn’t work anymore.  Add in other similar stories, such as completed buildings whose tenants have closed up shop such that the building owners (and our borrowers) are just about out of cash themselves.

Writ large this is the problem with commercial real estate, coming on the heels of the residential bust.  So banks are struggling, and many will fail.  Some of those will even, superficially, appear to be solvent.  I’m no fan of bank regulators (again, another post), but I haven’t heard about them trying to close solvent banks.  They might make bad decisions, and be too tough or too lenient (and the bias now is clearly to be too tough), but I don’t see them closing down solvent institutions.

Fair enough, but let’s put this in perspective.  The reason Charter made these bets in the first place was because of the state and federal regulators pressuring and/or incentivizing banks like Charter to do so.  The MFA acknowledged that Charter has serviced 95% of its loans with no problems so far.  Even with all of these points made by The Banking Guy (and they are excellent background points to consider), the fact is that the only reason the bank became insolvent is because OTS made the risk look worse on paper last fall.  Their loans were being paid back at a high rate, probably better than most that OTS allows to continue operations.  OTS appears to have set up Charter to fail with its new risk declarations.

Even if OTS is clean in this case, it should serve as an object lesson for banks that may decide to cooperate with efforts like MFA and the CRA.  And if their loan delinquency was really only 0.34%, the seizure still seems very, very strange.


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Well, obviously we can’t have well run busineses staying in business. It just isn’t right! What about the people that run bad businesses- it isn’t fair to them to have to close their doors just because someone else can do it better!

/channeling Atlas Shrugged

cibolo on January 24, 2010 at 12:20 PM

New Mexico is a leftist shi*hole, and the BHO Administration is just as incompetent…so, I don’t know who to root for here, Predator or Alien….

CapitalistPig on January 24, 2010 at 12:21 PM

Fundamentally transforming America via economic catastrophe.

Disturb the Universe on January 24, 2010 at 12:22 PM

Overwhelming the system, one bank at a time.

And so it begins.

This should be front page news everywhere.

Knucklehead on January 24, 2010 at 12:22 PM

I seem to notice that on the Saturday news they report ‘new’ banks taken over by the feds. I, like you Ed, think something is really rotten going on here. Please people, get to digging and see if something can be found out about this banking take-overs. This is becomming very disturbing, IMO.
L

letget on January 24, 2010 at 12:24 PM

Hugo Chavez and Robert Mugabe share a victory cigar. Their protege is doing well.

SKYFOX on January 24, 2010 at 12:25 PM

OTS either wanted to keep conducting social engineering despite the ruination it caused, or more maliciously wanted to redistribute Charter Bank to other owners.

I’m voting for option “B.”

notropis on January 24, 2010 at 12:25 PM

If the administration kills off all of the small banks that would free up markets for the “big” banks, which Obama wants to tax.

Simple.

Mord on January 24, 2010 at 12:27 PM

Our mortgage was held by Charter and I became a bit curious when a few weeks ago we were notified that it had been sold to another bank…all seems clear now.

Paradox Drive on January 24, 2010 at 12:27 PM

Sounds like somebody at Charter didn’t agree to a big enough payoff of somebody in the Obama administration . . . .

AZCoyote on January 24, 2010 at 12:28 PM

Note: I’ve edited the post above after re-reading the AJ articles. OTS didn’t demand that Charter take on more risk, but insisted that Charter increase the acknowledged level of existing risk five-fold, even though it doesn’t appear that it needed to do so.

Why did they need to shutter Charter when 99.66% of its loans were being paid on time?

Ed Morrissey on January 24, 2010 at 12:30 PM

I’m guessing that Charter didn’t make the required donations to the right people.

Vashta.Nerada on January 24, 2010 at 12:30 PM

Perhaps someone here with more knowledge of banks than I can explain how it is that there almost always seems to be a company lined up to take over the good parts of a “failed” banks as soon as the gubmint shuts its doors. Oddly enough, many of the hew owners seem to be investment groups….

The Charter Bank situation looks damn suspicious. If anyone in congress had a functioning spine, this would immediately become a situation calling for serious investigations of potential malfeasance on the part of the Osama Obama regime.

MrScribbler on January 24, 2010 at 12:30 PM

This looks very suspicious, as if OTS either wanted to keep conducting social engineering despite the ruination it caused, or more maliciously wanted to redistribute Charter Bank to other owners.

Maliciously redistributing the banks assets to other owners or to other more troubled banks to redistribute or mitigate the losses of already government owned banks?

fourdeucer on January 24, 2010 at 12:30 PM

That’s a nice bank you’ve got there, Charter. Be a real shame if something bad were to happen to it . . . .

Chicago politics go national.

AZCoyote on January 24, 2010 at 12:31 PM

Let’s not jump to conclusions. Obama has always said “he is a free market type of guy”..

Caper29 on January 24, 2010 at 12:32 PM

What was the number of minorities on the bank’s board?
This sounds like an effort to increase minority owned banks by eliminating non-minority ones, despite their level of service. I would not be surprised to find Charter’s assets bought up, a fire sale prices, by a minority led group.

Rocks on January 24, 2010 at 12:36 PM

I have never posted here but after lurking for a long time I have to let you know what is happening to us with our banking issues. All of this has shocked me as I had no idea and although we have no control and are beniffiting from it as a taxpayer it makes me mad. Our bank failed we had a business loan for approximately 4 mil. We have always paid the loan and our business is solid. The fed govt took over our loan and they are basically selling it to the highest bidder. Because we don’t have alot of hard assets we think the loan will be settled for around $500k. So we go from owing 4mil to 500k. The banker bidding on our loan is the same guy who gave us the loan in the first place. So the failed banker knows which loans are good bets and has inside info when buying the debt from the govt. This seemed hard to believe for me but it is true the same banker just bought an 89mil loan for 8mil. This seems to be a huge failure of how all of this is handled. On the plus side I think we will feel secure now and will be able to do the hiring we have been worried about.

ldbgcoleman on January 24, 2010 at 12:37 PM

Big Brother strikes again….

DL13 on January 24, 2010 at 12:37 PM

Hey Boss….spreadin’ it around ovah here-uh…

Ok Luke….spread it around ovah there-uh….

BobMbx on January 24, 2010 at 12:38 PM

Redistribution 101.

Why does Obama hate banks?

hillbillyjim on January 24, 2010 at 12:39 PM

I would not be surprised to find Charter’s assets bought up, a fire sale prices, by a minority led group.

Rocks on January 24, 2010 at 12:36 PM

If you suggest an organization like ACORN, you’d be a racist. Allow me.

It’s ACORN.

BobMbx on January 24, 2010 at 12:39 PM

No big deal. America’s largest banks only lost $66.3 billion this week.

Pocket change you can believe in.

JammieWearingFool on January 24, 2010 at 12:40 PM

Not only does this stink like an open-air fish market the day after a bomb scare, in August, but who wants to bet that the MSM will ignore it and no one else will seriously investigate it?

A scandal a day keeps attention astray, doesn’t it?

Merovign on January 24, 2010 at 12:42 PM

Charter had no delinquent commercial construction loans and only .34 percent of the loans in its commercial real estate portfolio were behind on their payments.

That says nothing about its residential portfolio.

Charter Bank, a closely held, family-run financial institution known for its financing of low-income housing in New Mexico

Figure out if their residential portfolio killed them. I’d bet serious cash that it did. Way, way too many “low-income housing” purchasers don’t pay their mortgages, as we’ve seen over the last year or so.

funky chicken on January 24, 2010 at 12:44 PM

Looks like the same crooked scheme the government wants to do with health care. Create a large sum of young, healthy uninsured people, force them into a government run policy and expect the existing insurance companies to compete with the government run plan. In this case a stable bank is forced into a pool with failed banks to make the failed banks look less toxic.

fourdeucer on January 24, 2010 at 12:45 PM

Adults

In

Charge

Del Dolemonte on January 24, 2010 at 12:47 PM

I agree. This stinks to high heaven.

On the other hand, if this were painted in the BEST possible light, it’s another example of what gov’t beaurocracies can do. Maybe, just maybe the various agencies weren’t talking to each other (shocker, I know), and this is what came of it. Comforting thought there for Obamacare.

All the options look bad, and inspire ZERO confidence.

ExSubNuke on January 24, 2010 at 12:48 PM

Repeal the Community Reinvestment Act.

Pelayo on January 24, 2010 at 12:48 PM

So Charter bank goes to Beal Bank in Plano, which is on record of making donations to Senator Cornyn (R) of Texas and this is a sinister conspiracy to help dems? What am I missing?

It is implied that Charter bank was not listing loses correctly and once it started using appropriate GAAP (general accepted accounting principals) things went South.

I could be wrong admittedly, but this one is not as interesting as the Ellie Lightly story.

koolbrease on January 24, 2010 at 12:49 PM

Mr. Potter won this one:

On Christmas Eve, 1946,[3] Uncle Billy is on his way to deposit $8,000 for the Building and Loan when he runs into Mr. Potter. He proudly shows Potter the front-page article about Harry receiving the Medal of Honor. Potter grabs the newspaper angrily and later discovers the money inside; he keeps it. When Uncle Billy goes to deposit the money, he finally realizes it is missing. Frantic searching fails to turn it up. In desperation, George appeals to Potter for a loan to save the company, but Potter turns him down and swears out a warrant for his arrest for bank fraud.

unclesmrgol on January 24, 2010 at 12:49 PM

Alinsky’s prime target: The Banks.

GarandFan on January 24, 2010 at 12:50 PM

How is Bill Richardson reacting to this hostility towards a good business in NM , from his guru ?

macncheez on January 24, 2010 at 12:50 PM

I seem to notice that on the Saturday news they report ‘new’ banks taken over by the feds.

Yes, they do, but there actually *is* a reason for that. When the Fed ‘takes over’ a bank, what is actually happening is they are being sold to another bank (or banks, if different sections are sold seperately). Getting this lined up can take some time, and everything has to be kept quiet so as to avoid a public bank run.

So, yes, they are burying it and hiding it, but not necessarily for nefarious reasons.

JamesLee on January 24, 2010 at 12:51 PM

Professors Cloward and Piven seen rubbing their hands together and saying together “excellent, excellent…”

Why do I get the impression that the best week since Krauthammer was on Spring Break in medical school will give way to a week in which we witness the Obami doubling down on destruction?

turfmann on January 24, 2010 at 12:51 PM

A Administration dominated by a political philosophy (Progressive) that has no qualms about eliminating individuals for the “greater good” certainly isn’t bothered about causing the demise of a private business.

bindare on January 24, 2010 at 12:52 PM

Exit question:

Did the bank in question donate money to Republican candidates?

This would be very interesting to know. We know all about the Chystler dealers who were put out of business (almost all donars to the Republicans) and those that benefited (Obama donars).

Chicago corruption on parade.

The Rock on January 24, 2010 at 12:53 PM

The people in this country better wake up and realize that Obama will not stop until the Government own,s every thing.Then they will have control of every one,s life.Where you live were you bank,work ,drive,eat,doctor you see,what you listen to or watch.This man and his cronies will not stop until we the people stop them.He is not just a left wing liberal he is a radical socialist. And why people like O,Reilly ,McCain and other can,t see that now is scary.

thmcbb on January 24, 2010 at 12:54 PM

So Charter bank goes to Beal Bank in Plano, which is on record of making donations to Senator Cornyn (R) of Texas and this is a sinister conspiracy to help dems? What am I missing?

It is implied that Charter bank was not listing loses correctly and once it started using appropriate GAAP (general accepted accounting principals) things went South.

I could be wrong admittedly, but this one is not as interesting as the Ellie Lightly story.

koolbrease on January 24, 2010 at 12:49 PM

Yep. The article said nothing about how many of their “low-income housing” residential mortgages were in trouble.

Crappy reporting, most likely.

funky chicken on January 24, 2010 at 1:02 PM

Doncha know, you punish banks for having a very high rate of mortgage payments that are being paid on time and you award banks that lend money to people who have bad credit habits and can’t afford to live in the house that they purchased?

yoda on January 24, 2010 at 1:03 PM

…And the worst smelling crap always seems to become public between 7 PM Friday and 6 AM the following Monday. It’s amazing how that happens. Almost like a TREND. Of course it would also be a perfect way to hide everything from the public. You don’t think this administration would do such a thing, do you?

/sarc off

GoldenEagle4444 on January 24, 2010 at 1:08 PM

koolbrease on January 24, 2010 at 12:49 PM

Yep. The article said nothing about how many of their “low-income housing” residential mortgages were in trouble.

Crappy reporting, most likely.

funky chicken on January 24, 2010 at 1:02 PM

Beal Financial Corp., based in Plano, Texas, agreed to assume the deposits and assets of Charter Bank. In addition, the FDIC and Beal Financial agreed to share losses on $805.5 million of the failed bank’s loans and other assets.

Beal 2008 campaign donations

batterup on January 24, 2010 at 1:09 PM

…And I’m telling you, if Bad Bernanke isn’t reconfirmed as Fed Chair, we’re going to be saddled with someone even worse. Then Repubs blamed (rightly so), Barry whines “I tried, but they blocked me”.

Republican handgun: meet foot.

Chewy the Lab on January 24, 2010 at 1:11 PM

Obama is NOT working to save the economy, he would not do things such as this.

Obama is not working to keep us safe from another terrorist attack on our soil, he would not do the things he has done.

The man is not playing for anything but the destruction of the USA. Albeit late, the populace of America is waking up to this.

jukin on January 24, 2010 at 1:11 PM

Robert Wertheim was active in several philanthropies, including Albuquerque Economic Development, Samaritan Counseling Center and Presbyterian Healthcare Foundation\’s efforts to provide care for indigent patients. Glenn Wertheim has been active in Habitat for Humanity and economic development efforts, including a stint as chairman of the Downtown Action Team.

Man, what did this guy do to piss off the King?

alflauren on January 24, 2010 at 1:15 PM

That’s what happens when the OTS hires sub-standard lawyers with little education or interest in finance/banking. Most of the lawyers on the government payroll are dumber than a box of rocks. The managers/supervisors and leadership are even dumber since they are promoted from within the ranks. It doesn’t surprise me that the regulators couldn’t figure out that the bank was solvent. I doubt most of them could pass an algebra course.

ThomasB. on January 24, 2010 at 1:17 PM

Compel catastrophe. Government takes over.

Socialist playbook.

rrpjr on January 24, 2010 at 1:21 PM

from ABC:
OGW: what grade would you give yourself?
BHO: um, um, um…

Any guess as to how many times Mr. Pantload actually gave himself grades??

Affirm. Action probably counts for about an 80. So the 5 pts. is really what the debate is all about, right? Given the entitlement, I’ll award a -20: 65. Remedial Liberty is in order.

Whatever happened to: “I think I’ve earned an 85.” No such language in this nitwits’ glossary. Not for him, his wife, and every other fed. appointment.

Undertaker on January 24, 2010 at 1:25 PM

C’mon folks As Obie has told us there is a time to make profit just not now. I’d sue their A$$es off.

Dire Straits on January 24, 2010 at 1:31 PM

batterup on January 24, 2010 at 1:09 PM

Who feeds on the dead carcass is not so interesting to me as whom the carcass supported before it became a carcass. Do you have those numbers?

unclesmrgol on January 24, 2010 at 1:35 PM

Charter had no delinquent commercial construction loans and only .34 percent of the loans in its commercial real estate portfolio were behind on their payments.

That says nothing about its residential portfolio.

Charter Bank, a closely held, family-run financial institution known for its financing of low-income housing in New Mexico

Figure out if their residential portfolio killed them. I’d bet serious cash that it did. Way, way too many “low-income housing” purchasers don’t pay their mortgages, as we’ve seen over the last year or so.

funky chicken on January 24, 2010 at 12:44 PM

That would change things a bit.

Count to 10 on January 24, 2010 at 1:35 PM

And I’m telling you, if Bad Bernanke isn’t reconfirmed as Fed Chair, we’re going to be saddled with someone even worse. Then Repubs blamed (rightly so), Barry whines “I tried, but they blocked me”.

Republican handgun: meet foot.

Chewy the Lab on January 24, 2010 at 1:11 PM

You might have a point but I am of the beleif that Obie and his crew do not know Jack sh!t about the Fed or the economy and this includes Larry and Christine. So whoever they put in it could not get much worse. But I maybe wrong.

Dire Straits on January 24, 2010 at 1:36 PM

Sounds like a replay of the mid 80′s when Fedzilla forced banks to call the notes on commercial real estate loans because the borrower was considered too risky even though the borrowers had never ever missed a payment in their lives. This happened to a friend of mine.

Kermit on January 24, 2010 at 1:43 PM

Boils down to…Obambis’ thugs strike again. I hope America can survive this administration. it is so scary out there. When will somebody in power bring these thugs up on charges, that they have destroyed the best country in the world………sigh………

clinker46 on January 24, 2010 at 1:44 PM

I was blinded by charisma. Obama was so convincing that I stopped caring about what he knew and started getting caught up in the euphoria.

The key passage.

That’s your problem, Jill. You switched your brain off. Willingly. Knowingly. Stupidly. And you enjoyed doing it.

It’s nobody’s fault but your own.

Not Palin’s. Not Bush’s. Not McCain’s. Not the GOP’s.

YOUR FAULT.

Teeny-bopping feckless fangirl r-tards elected this clown, all suffering from the same self-imposed delusions of grandeur as yourself.

Who’s “smarter” now?

Good Lt on January 24, 2010 at 1:44 PM

Mr. President, would you please work a little harder at dismantling Terrorist Networks, and not so much on dismantling the Free Enterprise system>

See, it seems to me one of them is a threat to our country, and the other one is sort of good to have around, and a lot of us are starting to wonder if you’ve got them switched.

Other than that, you’re doing a swell job, Mr. President!

Yours truly,

jeff_from_mpls on January 24, 2010 at 1:47 PM

Dire Straits on January 24, 2010 at 1:36 PM

Can you say “Timmy Twinkletoes” three times real fast???

Chewy the Lab on January 24, 2010 at 1:48 PM

New Mexico is a leftist shi*hole,……………
CapitalistPig on January 24, 2010 at 12:21 PM

North central and North Western NM could conceivably be called that. Southern NM and Eastern NM is hard core conservative. If we could keep the dang California refugees out, and keep the illegals from voting, we would stay that way, and maybe even reclaim Albuquerque too.

LegendHasIt on January 24, 2010 at 1:50 PM

Who feeds on the dead carcass is not so interesting to me as whom the carcass supported before it became a carcass. Do you have those numbers?

unclesmrgol on January 24, 2010 at 1:35 PM

Google says it’s on Huffpo but not on a cache version & I won’t click on active huffpo, it’s treyf. I posted that other info since the other poster made the Cornyn claim without any info – seems the contribution was rather minimal & all of Beal’s contributions were Texas candidates & conservatives.

batterup on January 24, 2010 at 1:50 PM

There’s something oh-so ironic about a government that is spending and borrowing its way into bankruptcy, closing down banks because of their balance sheets.

f.w.i.w., Here’s a story from this past March where the FDIC pushed a Connecticut bank to take on more risk.

Buy Danish on January 24, 2010 at 1:56 PM

ldbgcoleman on January 24, 2010 at 12:37 PM

You west from owing 4 million to 500K on the taxpayers dime? I have to be misunderstanding that.

Cindy Munford on January 24, 2010 at 2:09 PM

west = went. Sorry.

Cindy Munford on January 24, 2010 at 2:15 PM

You west from owing 4 million to 500K on the taxpayers dime?
Cindy Munford on January 24, 2010 at 2:09 PM

That’s what I understood him to say also.

Back to this story, here’s the Office of Thrift Supervision’s news release on the Charter Bank, with contact info, should any reporters wish to ask more questions about this deal.

Buy Danish on January 24, 2010 at 2:20 PM

I think that a lot of people are over-simplifying right now. The urge to “communicate” is strong.

And that leads to underexplaining the real challenges facing us.

Yes, if you explain, you may upset some people who don’t get it. But you will really lose the Independents if you don’t explain adequately.

The fact is that we can’t not spend anything. It’s true to some extent that we MUST spend to avoid a global depression.

How much, on what is the question.

AnninCA on January 24, 2010 at 2:37 PM

Compel catastrophe. Government takes over.

Socialist playbook.

rrpjr on January 24, 2010 at 1:21 PM

I don’t buy this far-right version. I think the liberals honestly think that broad programs that offer SOME benefits to a lot of people beats free-market programs that harm SOME groups.

Legitimate debate, in my opinion, that really can’t be debated, excpet on some abstract level that means nothing to any of us in real life.

Great pundit topics, in other words.

Voters need to stay focused on what makes sense for us, right now, with as much “stretch” as we can muster for what makes sense for all of us.

AnninCA on January 24, 2010 at 2:41 PM

….here’s the Office of Thrift Supervision’s news release on the Charter Bank, with contact info, should any reporters wish to ask more questions about this deal.
Buy Danish on January 24, 2010 at 2:20 PM

Apparently already gone into the black hole of memory and cyberspace. Direct link goes to a curt

“We’re Sorry”,

and looking for it through the press release index leads to:

“The document you requested can not be found or is undergoing routine maintenance.”

LegendHasIt on January 24, 2010 at 2:41 PM

LegendHasIt on January 24, 2010 at 2:41 PM

I can get to the Office of Thrift Supervision home page but their press releases load endlessly. The server is busy, busy, busy?

Buy Danish on January 24, 2010 at 2:54 PM

New Mexico has a long and troubled history of crooked real estate deals. They have builders, appraisers, and bankers ready to pounce on every dollar they can get. Do not take any financial institution shutdown in New Mexico and plot a national curve from it.

Freddy on January 24, 2010 at 3:23 PM

AnninCA, would you please, please enlighten us to the stance you have on anything that this Marxist administration is doing. Other than saying you don\’t agree with anything the \’right/far right\’ is saying.I have been trying to figure you out for months and have given you every conceivable benefit of the doubt, but I am confused by your consistently wishy-washy babble.You are either for the takeover and destruction of this country by Obama and the Dems or you are not. There is no more room for gray areas.

Sporty1946 on January 24, 2010 at 3:30 PM

AnninCA on January 24, 2010 at 2:41 PM

What gobblydygook. “Liberalism” has nothing to do with the roiling going on in financial markets or the strong-arm tactics being used on banks right now. That’s the real “real life” you so archly refer to. Read about BB&T being force-fed TARP money despite being over capitalized and objecting. Or the White House threats against Perella Weinberg to “destroy its reputation.” We’re looking at attacks on contractual rights and private industry on a scale not seen in US history. Recollecting the hoary agenda of Hubert Humphrey liberalism is rather seriously beside the point. This is leftism, and it has an entirely differently agenda.

rrpjr on January 24, 2010 at 3:47 PM

Barack Hussein Hugobama. Mmmmmmmm Mmmmmmmm mmmmmmmmthief

capejasmine on January 24, 2010 at 4:03 PM

AnninCA on January 24, 2010 at 2:41 PM

The bottom line is….even in what a liberal would consider a model of a perfect society, and everyone benefits, is not in existence. If you can name that society, please do so. Nowhere in history has it ever been shown, where everyone will benefit. In every society, be it communists, socialists, or democracies, there are the haves, and have nots. Yes…even in the U.S.S.R. Some faired better than others. That is how it always will be.

The difference between those socialist societies, and this society is….in theirs, you pretty much stay where you are. Yes, your government takes care of you, but every time you get a little ahead, the government comes after that, and takes it…to benefit everyone. In America, you have the choice to either sit idly by, and live in your circumstance, or work for a better one. That’s our freedoms, and those are in serious jeopardy of being stripped away from us. That is what America is about. When you can better your situation, you can then make the situation of someone else better. A pay it forward type of thing.

For anyone that sees this as acceptable, to destroy the lives, and wealth of others, to benefit themselves, ought to be ashamed. That’s stealing. Pure, and simple, and certainly not what our founding fathers had in mind.

capejasmine on January 24, 2010 at 4:09 PM

Ed, you’re guilty of practicing finance without a license. Your hypotheses are just a few of many explanations for the seizure, and are among the most unlikely. There are simply not enough facts to draw reasonable conclusions. Much as I dislike O’s policies and methods, I find your conspiracy theory to be uncharacteristically sloppy.

horatio on January 24, 2010 at 4:36 PM

This weeks bank failures also struck me as being unusual.
The only reason Charters bank struck me as being unusual was because I am inclined to doubt that they lost 400 million or so in deposits over the course of the past week. Did Charter experience a bank run?
I can’t help but to wonder if the bank failures are being spread out.
Usually when the banks are taken down they have greater assets then deposits. Charter bank had 1.2 billion in assets and 851.5 million in deposits.
The bank failure that struck me as being worthy of investigating is the Bank of Leeton in Leeton Mo. they had 20.1 million in assets and 20.4 million in deposits.

ErpichtAuf on January 24, 2010 at 4:37 PM

This should be a lessen to all banks. If you loan out money, they may shut you down. We want economic growth to stop. Choke the money at the source.

seven on January 24, 2010 at 5:12 PM

seven on January 24, 2010 at 5:12 PM

You know, I don’t believe all democrats are evil….but we have a good head start on those who are, and who want to take over power, and control in every facet of this country. It’s time to take them down.

capejasmine on January 24, 2010 at 5:22 PM

Which column does this go under: JOBS Saved Created
Hope and Change not just a dream!

shov74 on January 24, 2010 at 6:22 PM

Doesn’t matter. Banks are eeeeevil. Rich people are eeeeevil. Who cares if evil things die?

spmat on January 24, 2010 at 7:29 PM

If one needed a case study as to the corrosive effects of Federal influence in the loan market (Freddy/Fannie), one need look no further than here.

Obama Franks Waters LLC., destroyers of Charter’s integrity.

unclesmrgol on January 24, 2010 at 8:02 PM

Everything government touches turns to crap. It is sort of like the opposite of the Midas touch.

crosspatch on January 24, 2010 at 8:15 PM

Ed, you’re guilty of practicing finance without a license. Your hypotheses are just a few of many explanations for the seizure, and are among the most unlikely. There are simply not enough facts to draw reasonable conclusions. Much as I dislike O’s policies and methods, I find your conspiracy theory to be uncharacteristically sloppy.

horatio on January 24, 2010 at 4:36 PM

The reason these banks are going down is that the FDIC is flat broke. Now, why is the FDIC flat broke? What caused this economic disaster in the first place?

Lots of banks are sick right now, but nobody agrees to cover $400M (I’m assuming the supposed liability was cut in half) for a sick bank unless the bank was a lot less sick than it appears.

I wonder what would have happened if the Feds just promised Charter they’d cover $400M rather than Beal?

unclesmrgol on January 24, 2010 at 8:25 PM

Yes Cindy it’s true and we have no control over it whatsoever. The bank fails the feds take over the loan another bank buys the loan for pennies on the dollar. The fed is not set up to administrate loans. The bankers who made the bank fail know which loans are good payers so they go to work for another bank and go after those loans. We only have $500 k in hard assets so there you have it. We are benefitting and have had lots of guilt about it. But that’s how it works we don’t do any negotiating at all it’s all between the bank taking over the loan and the feds.Oh and the banker who brought the loan to the bank gets 10%.

ldbgcoleman on January 24, 2010 at 8:36 PM

All part of the plan. Small and medium sized banks tend to be owned by the “working middle class”, doctors and such. When they are shut down those “working middle class” assets flow up to the “rich entitlement class” or financial oligarchy. The regulators are just their muscle. They are doing exactly what they have been trained to do….shake down the middle class. Same as it ever was.

Lends a whole new light to the phrase “to big to fail” No “Working Middle Class” bank will ever be to big to fail…check out the size of WashMu. On the other hand Goldman is loaded down with Trillions of derivative debt but gets a pass.

speed on January 24, 2010 at 9:44 PM

Great Obama Administration philosophy: Close any business that could show a loss on their corporate tax return.
This will also prevent jobs from being lost due to their intervention.
Isn’t this how the media and this administration explain it?

Cybergeezer on January 25, 2010 at 9:44 AM

So when does Citigroup get the same treatment? They should be in receivership now, for Pete’s sake.

riverrat10k on January 25, 2010 at 10:25 AM