Guess they took on too much government cheese…
They should have known better…
Washington Post Staff Writer
Monday, September 13, 2010; 9:17 PM
Big Wall Street firms have the most bruised public reputations, but it’s a collection of smaller banks that continues to plague the Treasury Department’s bank bailout program.
The latest report from the agency shows that more than 120 institutions – nearly all of them small banks – have missed their scheduled quarterly dividend payments, which is more than a sixth of the banks that received federal aid during the financial crisis.
In addition, five banks that received capital injections from the controversial $700 billion Troubled Assets Relief Program have failed altogether, making it highly unlikely that taxpayers will recover the nearly $3 billion poured into those institutions.
The Treasury report showed that at the end of August, a record six banks each missed six dividend payments. Saigon National Bank in Southern California has missed seven.
The rising number of “deadbeat” banks, as they are known, has prompted calls for Treasury officials to take action to protect taxpayers’ investment.
The bailout legislation gives Treasury the authority to appoint two members to the boards of banks that miss six or more dividend payments. But the agency has refrained from doing so.
In its report, Treasury stated that in weighing whether to exercise its option to appoint directors, it would “prioritize” institutions in part based on whether the government’s investment in the bank exceeds $25 million.
That list includes AnchorBank of Wisconsin, which received $110 million, and Seacoast National Bank of Florida, which received $50 million.
“We are exploring a number of options on how to properly exercise our contractual rights so to best protect the interests of taxpayers,” Treasury spokesman Mark Paustenbach said.
Continue on here…