Federal bailout money is probably going to politically well-connected banks rather than on a needs basis, claims Camden Fine, CEO of the Independent Community Bankers of America.
Camden's organization, which represents the interests of small community banks, has some 5,000 member banks nationwide in 18,000 locations and $908 billion in assets.
Bank applications for emergency federal bailout aid are backing up and await action, claim Camden and other industry leaders, lawmakers, and regulators.
Meanwhile, the big players with political clout are getting the money.
"I think there is a suspicion among a large number of our members that it's who you know rather than the merits of the application," Camden told The Washington Post.
"I don't know that to be a fact," says Camden. "But there is a strong undercurrent of suspicion among my members that you have to have some sort of connection before you get the golden touch or the blessing from Treasury to get the money."
From the inception of the plan in October, the Treasury has given cash in return for equity positions to just 350 banks.
Regulators, however, contend that some 1,600 banks have so far requested government help, to no avail.
So far Treasury has kept mum on how they determine what banks get the money before others. Among the reasons claimed for its secrecy: "The need to protect sensitive market information."
Wayne Abernathy, executive vice president of the American Bankers Association, says "It's really important for Treasury to make the process more visible and more clear."
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