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Saturday, April 24, 2010

Broadway Bank has been closed by federal regulators.

I first got wind of this on Marathon Pundit. Then it turns out that Capitol Fax was keeping track of this story. Chicago News Bench (I prefer to call that blog, "The Bench") gives us a glimpse of the media presence in that neighborhood. In fact a neighborhood blog, Edgewater Community Buzz even has several stories up about the closure of Broadway Bank.

I've been reading about banks in Illinois. Broadway Bank isn't the only bank that has failed in this state, especially on Friday. Not today and not since the economy tanked within the last two or so years.

This is news because a US Senate candidate Alexi Giannoulias was once a loan officer at this bank. It's his family's bank and it was news that our current state treasurer had loaned money to organized crime figures.

Whatever happened my understanding about this story is that this bank had made some risky real estate investments and was without a reserve fund. The bank is now closed because the bank couldn't raise the necessary capital to continue operating.

I do believe that Giannoulis may not have had a hand in the failure of this bank. Whether as an officer or as a mere investor since his family owns this bank. It's only an issue because of his association with this bank and this failure comes at a bad time for sure.

To be sure, most "informed" Illinois voters may be familiar with the allegations that Giannoulias may have loaned money to mobsters. It's been out there since he first ran for state treasurer in 2006. In that year however it may not have mattered as it was a Democratic year and unless he had some other serious dirt he was getting elected that year.

2010 may well turn out to be a different year. Illinois Congressman Mark Kirk may give the state treasurer a run for his money. Even if Kirk may generally be on the outs with the more conservative wing of the Republican party. Even worse this year may not be a huge Democratic year as it was in 2006.

Giannoulias' mentor (well actually basketball buddy) is none other than President Obama, who in 2006 cut an ad for him when he was still a US Senator. Unfortunately, it seems as if the President isn't all that interested in helping out his old mentee. Although it looks like he may be getting some help from the White House in light of this.

Either way I think it's a bad thing that a local bank goes under. Especially a community based bank such as Broadway as it was based on Chicago's North Side. Let's hope that this bank may find itself under local control once again!

Giannoulias responds to bank closure - Capitol Fax

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