Showing posts with label Sen. Daniel K. Inouye. Show all posts
Showing posts with label Sen. Daniel K. Inouye. Show all posts

Wednesday, July 1, 2009

Central Pacific versus OneUnited

According to the Washington Post, "Sen. Daniel K. Inouye's staff contacted federal regulators last fall to ask about the bailout application of an ailing Hawaii bank that he had helped to establish and where he has invested the bulk of his personal wealth."

While we have seen this before, I think the Senator's case differs significantly from the OneUnited case. Black-owned OneUnited "sought aid as community 'beacon'", had few inner city loans, and still "got $12 million from the US bank bailout fund."

The cases are different because:

"Regulators in October (2008) concluded in a cease-and-desist order that OneUnited.. had poor standards for qualifying and documenting loans, and gave top executives excessive pay and perks. Two of the perks regulators targeted were a $6.4 million beachfront Santa Monica mansion (1% of OneUnited's assets) that management used while in California and a Porsche SUV driven on company business in Boston."

The bank the Senator helped, "Central Pacific, was founded in 1954 by a group of World War II veterans including Inouye who were emerging leaders in Hawaii's Japanese American community. Inouye, who became the bank's first secretary, said that he initially invested $3,000, the minimum amount possible. Central Pacific is Hawaii's fourth-largest bank, holding about 15 percent of the state's deposits."

The Senator asked about the application. He did not facilitate a meeting between bank management and the Secretary of the Treasury (as was the case with OneUnited). Central Pacific had no cease-and-desist orders pending and was too significant (and too responsible) to fail.