Maybe TPMmuckraker will reorganize as a bank to get our hands on some taxpayer money. After all, everyone’s doing it.
The Project on Government Oversight (POGO), a good-government group, last week sent a letter to Congressional leaders identifying eight financial institutions that have sought to qualify for funds under the federal bailout program by purchasing banks, to which bailout money is restricted. In a related blog post, POGO accused the companies of “apparently trying to jump on the gravy train.”
– Lincoln National Corporation is in the process of acquiring Newton County Loan and Savings, an Indiana bank.
– Hartford Financial is acquiring Federal Trust Corporation, the parent company of Federal Trust Bank in Florida.
– Genworth Financial is purchasing InterBank FSB in Minnesota.
– CIT Group has converted its Utah Industrial Bank to a Utah State Bank.
– Morgan Stanley was approved as a Bank Holding Company on September 21, 2008.
– GMAC Financial Services has opened GMAC Bank, a Utah chartered Federal Reserve Bank member bank.
– American Express was approved as a Bank Holding Company on November 10, 2008. The company owns American Express Centurion Bank, an industrial loan bank, and American Express Bank FSB, a federal savings bank in Utah.
– Goldman Sachs was approved as a Bank Holding Company in mid-September and opened Goldman Sachs Bank USA in Salt Lake City.
As POGO noted, these institutions “seem to be straying from their business models to become traditional banks.”
And it pointed out that in the case of one of these companies, its CEO had recently said they were doing fine:
Kenneth Chenault, American Express’s CEO, asserted that the company’s “business model is well positioned to generate earnings and excess capital even in an economic environment that is likely to be among the weakest in many years”13 less than a month before becoming a Bank Holding Company and, presumably, applying for TARP funds.
In a sense though, it’s hard to blame these companies for trying to get a piece of the action. After all, despite their financing arms, GM and Chrysler aren’t banks either, but it looks like their federal bailout will come from the very same TARP funds.