In her 2007 remarks, Ms. Waters alluded to two banks, Independence Bank of Washington, D.C., and "another bank that was about to be acquired by a major white bank out of Illinois."
Ms. Waters didn't mention that OneUnited had been an unsuccessful suitor of Independence, which had been taken over several years earlier. The second bank, which she didn't name, appears to have been Family Savings Bank of Los Angeles. In 2002, that bank backed out of a merger agreement with FBOP Bank of Oak Brook, Ill., and shortly afterward was acquired by OneUnited.
News reports at the time credited the intervention of Ms. Waters and others for Family Savings's change of heart.
At the hearing, Ms. Waters praised OneUnited's senior counsel, Robert P. Cooper, as "typical of the young, brilliant minds that have been amassed at OneUnited Bank."
OneUnited's minority-lending record is mixed. The bank received "outstanding" Community Reinvestment Act ratings for lending in Los Angeles. It has weak ratings in Massachusetts and failed to meet minimum standards in Florida.
In January, Ms. Waters acknowledged she made a call to the Treasury on OneUnited's behalf. The bank's capital, which was heavily invested in shares of Fannie Mae and Freddie Mac, was all but wiped out with the federal takeover of the two mortgage giants, and the bank was seeking help from regulators.
OneUnited eventually secured bailout funds under the government's $700 billion Troubled Asset Relief Program, which was set up later that month.
In a brief interview in January, Ms. Waters said she was unaware the bank received $12 million of TARP money, which arrived in December. OneUnited was "just a small" bank, she said.
A provision designed to aid OneUnited was written into the federal bailout legislation by Mr. Frank, who is chairman of the financial-services panel. Mr. Frank has said he inserted the provision to help the only African-American owned bank in his home state. He said in an interview that Ms. Waters's interest "had zero impact on the outcome because I would have done it anyway."
In October, regulators demanded that OneUnited raise fresh capital and name an independent board. The bank was ordered to stop paying for a Porsche used by one of its executives and its chairman's $6.4 million beachfront home in Pacific Palisades, Calif., a luxury enclave between Malibu and Santa Monica.
Write to Susan Schmidt at susan.schmidt@wsj.com |
