Shorebank in Chicago was closed by regulators last Friday. This bank, which has been prominent for its commitment to the needs of local business and low-income clients, was closed “after Wall Street backers failed to rescue the institution.” Over the past 2 years the federal government has lavished hundreds of billions of dollars on major Wall Street institutions while allowing small, local banks to fail. One must wonder why. According to a Reuters report:
“… the [Shorebank] bank, which was put on the ropes when the recession hit its lower-income borrowers especially hard, was unable to secure the funds it was seeking from the government’s Troubled Asset Relief Program, or TARP, it needed to match private-sector pledges.”
Read the full report here.