U.S. Rep. Paul Broun said Monday federal regulators were meting out political retribution on his Republican-leaning state with discriminatory banking oversight.
Georgia leads all other states in number of government seized financial institutions, accounting by the Federal Deposit Insurance Corporation has revealed for a number of consecutive years.
But Broun, whose own investment in a partially family-owned bank was lost when it was seized last year, said regulators are targeting for closure even those Peach State bankers with black ledgers.
“I don’t know why,” he said, according to local paper Athens Banner-Herald, at a Monday launch event for his reelection campaign. “Maybe because we’re a Republican state.”
The FDIC doesn’t close failed banks, spokesman David Barr said. That’s the responsibility of the state agency that chartered the bank — in Georgia’s case, the Department of Banking and Finance — or the Office of the Comptroller of the Currency for nationally chartered banks, he said. …
Banks are being forced to write down performing loans, decapitalizing the banks, because of the mark-to-market accounting rule, Broun said. The rule requires banks to account for the current value of an investment, rather than the amount they paid, which proponents say gives a truer picture of their financial health.
Broun also blamed bank failures on federal laws like the 1977 Community Reinvestment Act, which bars lenders from discriminating, and the 2010 Dodd-Frank law regulating Wall Street, as well as political pressure the defunct liberal group ACORN put on banks to loan money to people who couldn’t pay it back.
76 Georgia-headquartered banks have been shuttered by state and federal regulators in the last four years.
- James Richardson