Rep. Darrell Issa, the lead Republican on the House Oversight and Government Reform Committee, is asking the Federal Deposit Insurance Corp. to explain why it waited so long to close a bank owned by the family of a candidate for the U.S. Senate.
In a letter Wednesday to FDIC Chairman Sheila Bair, the California Republican called for closer scrutiny of Broadway Bank's closure last week, which cost the Deposit Insurance Fund $394.3 million; Issa said regulators knew months in advance of the bank's problems.
Broadway entered into a consent order with the FDIC and the Illinois Division of Banking to raise extra capital in January.
"The political circumstance and unusually high cost to the FDIC for a bank of its size necessitate answers from the FDIC about this takeover," Issa wrote.
Broadway — a closely held community bank owned by the family of Illinois State Treasurer Alexi Giannoulias, who is a Democratic candidate for the Senate — was among six other Illinois banks that were closed on April 23.
However, Issa noted, Broadway suffered higher losses, both in dollars and as a percentage of total deposits, than any other bank that day.
