Have I Got an Investment for You

First, let me tell you about an order the FDIC hit my investment selection with. My investment, OneUnited Bank, was ordered to cease and desist:

a. Operating with an inadequate level of capital for the kind and quality of assets held;
b. Failing to provide adequate supervision and direction over the officers of the Bank;
c. Operating without an appropriate risk management program that establishes acceptable risk exposure and ensures appropriate policies and practices are in place;
d. Allowing the payment of excessive compensation, fees and benefits to its senior executive officers;
e. Operating with an excessive level of criticized assets;
f. Operating without effective underwriting standards and practices;
g. Operating without an effective loan documentation program;
h. Failing to provide for an effective system to identify problem assets and prevent deterioration;
i. Engaging in speculative investment practices and failing to prudently diversify its equities portfolio;
j. Operating without a system to monitor and evaluate earnings and ensure maintenance of adequate capital and reserves;
k. Operating with deficient earnings;
l. Operating without sufficient liquidity, in light of the asset and liability mix and overall financial condition of the Bank; and
m. Committing violations of law and regulation.

Okay, it does look a trifle dicey. But, hey, the bank was able to enjoy $12,000,000 of our TARP money due apparently to the concerns Barney Frank had about the bank's troubles after investments in Fannie Mae and Freddie Mac went sour. So, why don't you look closer? The Treasury obviously did before giving OneUnited our money.

See, the Treasury was supposed to give our money to healthy banks so that they would be able to lend to people. And OneUnited had little capital left plus the bank was accused of poor lending practices and paying their executives too much so that they could buy gas for the company Porsche.

But these minor problems should not bother you as OneUnited had a friend in Washington, a guy named Barney Frank, who happened to be the chairman of the House Financial Services Committee. Barney helped write the bill so that OneUnited would be eligible for TARP funds and then he spoke to someone in Treasury about the bank's plight.

So, you see. You've nothing to worry about. You have a friend in Washington.