"OneUnited skips third payment; Treasury gets no dividend from bailed-out lender" by Todd Wallack, Globe Staff | December 22, 2009
OneUnited Bank, one of the nation’s largest minority-owned banks, skipped another dividend payment to the US government on the $12.1 million it received under the financial industry bailout, according to newly released data from the US Treasury Department.
The Nov. 16 payment appears to be the third quarterly dividend the bank has skipped or deferred since receiving the US funds last December. However, the Treasury Department said banks are not required to make payments each quarter....
Institutions without a holding company, such as OneUnited, are not required to make up the dividend payments, essentially giving them a no-interest loan, said Russ Yates of SNL Research.
However, there are other consequences. If OneUnited and other banks do not pay the quarterly dividends to the government, they cannot pay dividends to their regular shareholders that quarter, either. Because the government holds preferred stock, it is first to receive dividends....
In October, bank regulators ordered OneUnited to improve its finances and cut back on compensation and perks to executives, including a Porsche SUV and beachfront mansion in Santa Monica, Calif., used by chief executive Kevin Cohee.
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To shore up its finances, OneUnited said it raised $20 million from private investors and then received $12.1 million in government aid. US Representative Barney Frank, a Newton Democrat, acknowledged intervening on OneUnited’s behalf.
Related: Frank Fiddled With Bailout Funds (And Other Frauds)
US Representative Maxine Waters is under investigation by the US House Ethics Committee after she arranged a meeting between OneUnited executives and members of the Treasury Department to discuss the plight of minority-owned banks. Waters’s husband previously served as a director the bank and owned stock in it....
Also see: Betting on Barney Frank
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Betting on Barney Frank
Party really doesn't matter, does it?
"Missed payments vexing to Frank; OneUnited behind on TARP dividends" by Todd Wallack, Globe Staff | December 25, 2009
US Representative Barney Frank, who was instrumental in helping OneUnited Bank line up $12.1 million in bailout funds a year ago, said he was troubled by the Boston bank not making three straight quarterly dividend payments to the government.
“I am disappointed,’’ said Frank, who helped craft language in the Troubled Asset Relief Program that made OneUnited eligible for funds. Frank, a Newton Democrat, said he would not have tried to help OneUnited if he knew the bank would not pay the government its dividends.
In most cases, when banks miss a dividend payment, it is added to the amount the banks must eventually pay the government. But some banks, such as OneUnited, are not required to make up any missed dividends, essentially giving them a no-interest loan, based on the terms of their contacts with the Treasury Department.
Where is your no-interest loan based on contacts at Treasury, Amurkn?
OneUnited did not return calls seeking comment. It was unclear why the bank didn’t make the payments. The bank reported earning $3.1 million through the first nine months of 2009, compared with losing $44.7 million in the same period a year ago.
Oh, so they BLEW OFF PAYMENTS to the TAXPAYER while they were STILL MAKING MONEY, huh?
Frank, who chairs the powerful House Committee on Financial Services, said he originally wanted to make OneUnited eligible for the aid because as a prominent minority-owned institution, he felt it was worth saving. OneUnited is one of the largest black-owned banks in the country....
At the time it received the government money a year ago, OneUnited had been hit with steep losses in investments in Fannie Mae and Freddie Mac....
The House Ethics Committee is investigating whether a second member of Congress, Representative Maxine Waters, Democrat of California, improperly intervened on OneUnited’s behalf. Waters’s husband is a former OneUnited director and owned stock in the bank. Though based in Boston, OneUnited does much of its lending in Los Angeles.
University of Michigan Business School professors Ran Duchin and Denis Sosyura cited OneUnited as an example of a bank that benefited from its political connections in a report they issued this week on banks that received government funds.
The bank benefited from its political connections? You're kidding?!
The study found that banks with ties to members of congressional finance committees were more likely to receive TARP aid. The professors also found evidence that banks were more likely to receive TARP money if their executives served on Federal Reserve boards or spent money on political contributions and lobbying.
Gee, that's a surprise, huh, readers?
But despite OneUnited’s problems, Frank said he was pleased that most banks that received TARP money are doing well and are paying back the government....
Yeah, right, you made out on the deal, America.
Now why did the Globe cut this comment, readers?
"I think the TARP was a great success," Frank said. "It helped avoid serious economic damage. I think it is a good thing that we have a Bank of America that is surviving and the money is coming back."
Related: Sunday Globe Censorship: Barney Frank Tells Gays to Go F*** Themselves
Boston Globe Censored Briefs: Barney Frank Exhales Fart Mist
Because it makes Barney look bad?
