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It’s a Wonderful Life or is it?
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By L. Nicole Trottie, Publisher
November 30, 2009
Locales form a coalition to save community banks
By L. NICOLE TROTTIE
Publisher
November 30, 2009
Hailed as a classic and regarded a staple of Christ-mas television the movie, It’s a Wonderful Life
depicts a businessman in his darkest hour. George Bailey, a man whose imminent suicide on
Christmas Eve over a “lost” deposit and failed savings and loan gains the attention of his
guardian angel (Clarence) and townspeople.
If I could rewrite the It’s a Wonderful Life script in modern day times, the Federal Deposit
Insurance Corp (FDIC) would easily cast the roll of Mr. Potter; the sleazy, heartless, opportunist
who attempted to rob Bailey’s bank and the townspeople of their money, hopes and future
prospects.
That’s exactly how Westsider’s, gathered at Judson Baptist Church, likened the take over of Park
National Bank by the FDIC three weeks ago.
“The government rescues banks that are ‘too big to fail,’ not ones that are too good to save.” That
was the sentiment expressed by David Pope, Oak Park, village board president and panelist of the
Coalition to Save Community Banks two weeks ago.
Mike Kelly, chairman and sole owner of the holding company that controlled Park National Bank
didn’t fail due to making a series of bad loans. No, the bulk of Kelly’s investment in the preferred
stock of Fannie Mae and Freddie Mac turned the fate of FBOP Corp.
Fannie and Freddie are government sponsored programs whose purpose is to make home
ownership a reality for low-income families by buying up those loans from banks so they can, in
turn, make more loans. But over the last couple years when too many of those loans defaulted the
government stepped in and bailed out Fannie and Freddie but left their shareholders, like Kelly,
holding the purse strings to the tune of $900 million.
It was the nature, the humanitarian, in Kelly to invest in businesses with a social conscious. That
was his business model – not just to make a buck – build up people and the community will
follow. Before the take over of Park National Bank he formed Park Bank Initiatives (PBI), a not-for-
profit that did just that – build community.
Park’s branch located in Maywood purchased several foreclosed homes in the area, which Kelly
rehabbed and placed on the market for sale to residents at below interest loan rates. This
summer, Park announced its initiative to bring to Maywood an alternative charter school for
elementary students. On the west side Kelly originated a $22 million interest-free loan to build
Christ the King Jesuit College Prep, now thriving in the Austin neighborhood. Kelly helped to form
the Maywood Community Development along with several area banks, including Maywood-based
First Suburban National Bank and Forest Park Bank & Trust, to help revitalize community and
economic development growth.
None of which made a hill of beans when agents of the FDIC descended on FBOP’s
headquarters, declared it insolvent and announced its assets were being transferred to
Minneapolis-based U.S. Bancorp. Nor did it matter that PNB was solvent and Kelly reportedly
secured $600 million in private equity for the troubled holding company.
Oddly, the morning of the bank seizure, Treasury Secretary Timothy Geithner was in Chicago
presenting Kelly and his Park National Bank Initiatives with $50 million in federal tax credits to
leverage more affordable housing.
The heat comes now from the neighborhoods left, from people like Bob Vondrasek, executive
director of the South Austin Coalition, reported John McCarron in the Chicago Tribune
“People are getting fed up with actions that hurt Main Street, that endanger our community banks,
that instead favor Wall Street,” Vondrasek griped. “The smaller banks like Park National, the banks
we depend on here in the neighborhoods, aren’t being helped. They’re being fed to the big banks.
Meanwhile the big banks are being bailed out by the taxpayers. What’s going on here?”
”It’s a good question”, posed McCarron. “Especially when it’s disclosed that Kelly and Park
National were turned down twice for the Treasury’s Troubled Asset Relief Program. So far TARP
has loaned out more than $450 billion of an authorized $700 billion to the likes of Citigroup, Bank
of America and, of course, insurer AIG so it could indemnify Goldman Sachs and Merrill Lynch,”
McCarron added.
Last week a newly formed Coalition to Save Community Banking, whose charter members range
from Vondrasek to Rev. Ira Acree, Rev. Marshall Hatch to Pope sent a delegation to Washington
with a petition. They want U.S. Rep. Barney Frank’s Financial Services Committee to investigate
why so much help has been extended to the big banks, but so little to the community banks.
McCarron raises the issue, that as the coalition gets deeper into the issues, “They may want to
ask some other questions: Why are community banks being jammed with higher FDIC insurance
premiums when it was the big banks and their subprime subsidiaries that caused this mess?
Shouldn’t banks that are “too big to fail” have their own insurance pool and pay premiums
accordingly? And why, oh why, are big banks dragging their feet on applications for loan
modifications, even as foreclosures pile up and blight our neighborhoods?” “Local banks that
invest in community are disappearing. Park National won’t be the last that’s “too good to save.”
If it were not for Mike Kelly and a handful of other like-minded community conscious folk the West
Suburban Journal may have never made it to press, onto coffee tables and into newspaper
publishing history.
At the tearful but happy ending of It’s a Wonderful Life, Bailey’s guardian angel, Clarence, restores
his faith. Bailey runs home, renewed in spirit, to find his family and friends have collected a huge
amount of money to rescue him and the loan company. He is toasted by his brother, “The richest
man in town”
This season let’s toast to Mike Kelly and our remaining community banks. Kelly touched many
lives, he made a difference and he made a lasting impact in the communities within his vast
footprint and that makes him the richest man in the world.
John McCarron teaches, writes and consults on urban affairs.
November 30, 2009
Locales form a coalition to save community banks
By L. NICOLE TROTTIE
Publisher
November 30, 2009
Hailed as a classic and regarded a staple of Christ-mas television the movie, It’s a Wonderful Life
depicts a businessman in his darkest hour. George Bailey, a man whose imminent suicide on
Christmas Eve over a “lost” deposit and failed savings and loan gains the attention of his
guardian angel (Clarence) and townspeople.
If I could rewrite the It’s a Wonderful Life script in modern day times, the Federal Deposit
Insurance Corp (FDIC) would easily cast the roll of Mr. Potter; the sleazy, heartless, opportunist
who attempted to rob Bailey’s bank and the townspeople of their money, hopes and future
prospects.
That’s exactly how Westsider’s, gathered at Judson Baptist Church, likened the take over of Park
National Bank by the FDIC three weeks ago.
“The government rescues banks that are ‘too big to fail,’ not ones that are too good to save.” That
was the sentiment expressed by David Pope, Oak Park, village board president and panelist of the
Coalition to Save Community Banks two weeks ago.
Mike Kelly, chairman and sole owner of the holding company that controlled Park National Bank
didn’t fail due to making a series of bad loans. No, the bulk of Kelly’s investment in the preferred
stock of Fannie Mae and Freddie Mac turned the fate of FBOP Corp.
Fannie and Freddie are government sponsored programs whose purpose is to make home
ownership a reality for low-income families by buying up those loans from banks so they can, in
turn, make more loans. But over the last couple years when too many of those loans defaulted the
government stepped in and bailed out Fannie and Freddie but left their shareholders, like Kelly,
holding the purse strings to the tune of $900 million.
It was the nature, the humanitarian, in Kelly to invest in businesses with a social conscious. That
was his business model – not just to make a buck – build up people and the community will
follow. Before the take over of Park National Bank he formed Park Bank Initiatives (PBI), a not-for-
profit that did just that – build community.
Park’s branch located in Maywood purchased several foreclosed homes in the area, which Kelly
rehabbed and placed on the market for sale to residents at below interest loan rates. This
summer, Park announced its initiative to bring to Maywood an alternative charter school for
elementary students. On the west side Kelly originated a $22 million interest-free loan to build
Christ the King Jesuit College Prep, now thriving in the Austin neighborhood. Kelly helped to form
the Maywood Community Development along with several area banks, including Maywood-based
First Suburban National Bank and Forest Park Bank & Trust, to help revitalize community and
economic development growth.
None of which made a hill of beans when agents of the FDIC descended on FBOP’s
headquarters, declared it insolvent and announced its assets were being transferred to
Minneapolis-based U.S. Bancorp. Nor did it matter that PNB was solvent and Kelly reportedly
secured $600 million in private equity for the troubled holding company.
Oddly, the morning of the bank seizure, Treasury Secretary Timothy Geithner was in Chicago
presenting Kelly and his Park National Bank Initiatives with $50 million in federal tax credits to
leverage more affordable housing.
The heat comes now from the neighborhoods left, from people like Bob Vondrasek, executive
director of the South Austin Coalition, reported John McCarron in the Chicago Tribune
“People are getting fed up with actions that hurt Main Street, that endanger our community banks,
that instead favor Wall Street,” Vondrasek griped. “The smaller banks like Park National, the banks
we depend on here in the neighborhoods, aren’t being helped. They’re being fed to the big banks.
Meanwhile the big banks are being bailed out by the taxpayers. What’s going on here?”
”It’s a good question”, posed McCarron. “Especially when it’s disclosed that Kelly and Park
National were turned down twice for the Treasury’s Troubled Asset Relief Program. So far TARP
has loaned out more than $450 billion of an authorized $700 billion to the likes of Citigroup, Bank
of America and, of course, insurer AIG so it could indemnify Goldman Sachs and Merrill Lynch,”
McCarron added.
Last week a newly formed Coalition to Save Community Banking, whose charter members range
from Vondrasek to Rev. Ira Acree, Rev. Marshall Hatch to Pope sent a delegation to Washington
with a petition. They want U.S. Rep. Barney Frank’s Financial Services Committee to investigate
why so much help has been extended to the big banks, but so little to the community banks.
McCarron raises the issue, that as the coalition gets deeper into the issues, “They may want to
ask some other questions: Why are community banks being jammed with higher FDIC insurance
premiums when it was the big banks and their subprime subsidiaries that caused this mess?
Shouldn’t banks that are “too big to fail” have their own insurance pool and pay premiums
accordingly? And why, oh why, are big banks dragging their feet on applications for loan
modifications, even as foreclosures pile up and blight our neighborhoods?” “Local banks that
invest in community are disappearing. Park National won’t be the last that’s “too good to save.”
If it were not for Mike Kelly and a handful of other like-minded community conscious folk the West
Suburban Journal may have never made it to press, onto coffee tables and into newspaper
publishing history.
At the tearful but happy ending of It’s a Wonderful Life, Bailey’s guardian angel, Clarence, restores
his faith. Bailey runs home, renewed in spirit, to find his family and friends have collected a huge
amount of money to rescue him and the loan company. He is toasted by his brother, “The richest
man in town”
This season let’s toast to Mike Kelly and our remaining community banks. Kelly touched many
lives, he made a difference and he made a lasting impact in the communities within his vast
footprint and that makes him the richest man in the world.
John McCarron teaches, writes and consults on urban affairs.
