Banking Law

A couple of follow ups to recent blog posts:

The New York Times ran a story last week about the strong fight that industrial banks are waging to preserve their form of charter in the face of an assault on it by the Obama administration. As EnerBankUSA CEO Louise Kelly succinctly put the problem, "We are talking about survival here."

The article summarizes some of the arguments that both critics and supporters are raising. The article also points out that some headway has already been made by the industry, with both Barney Frank and Sheila Bair promising that they would allow commercial enterprises that currently own industrial banks to keep them (although one of Ms. Bair's employees felt compelled to pen a letter to the editor of The Times that "clarifies" that Ms. Bair also believes that holding companies of industrial banks "should be subject to consolidated regulatory oversight, consistent with requirements imposed on other owners of depository institutions."). That's a good starting point for negotiations, but not an end point. As I noted three weeks ago, history has shown that "grandfathering" means a slow, rather than a quick, death, but it ensures eventual extinction. The industry has gathered its muscle and is slugging it out for survival. Don't count it out, not by a long shot.

A post I ran way back in March of this year caused an alert reader to remind me that Maxine Waters' shenanigans with respect to a bank in which her husband was involved finally made it to the level of a House Ethics Committee investigation. Given Ms. Waters previous experiences with the House Ethics Committee, which she's told to go jump in the lake when it cautioned her about her allegedly unethical behavior in the past, I'll refrain from waiting on pins and needles for a smackdown of Rep. Waters from her colleagues. She may be sleazy, but she appears to be coated with teflon when it comes to making any charges stick. Another reader also notified me that Ms. Waters and her spousal unit have an equally envious track record with respect for their neighbors and local housing codes.

Despite repeated assurances over the past five years, their out-of-district, multimillion dollar estate is still in a state of disrepair, a veritable construction site surrounded by a chain link fence, weeds, construction materials, gravel, debris, and dumpsters.

She's definitely a piece of work.