Flak for Dodd
Lawmakers were pretty tough in their condemnation of the $165 million in retention bonuses given to executives at American International Group Inc., the recipient of four government bailouts.But some of the harshest words were saved for Senate Banking Committee Chairman Chris Dodd, who was blamed — with a lot of encouragement from Republicans — for letting the executives receive bonuses in the first place.
"Chris Dodd is a lying weasel," declared an editorial in the New Haven Register.
The editorial was published after Dodd tried to shift blame for why a provision he authored as part of the economic stimulus bill exempted bonuses before Feb. 11. At first he said he was not sure who had added the exemption, but he later acknowledged he had done so at the request of the Obama administration.
The incident was a field day for Fox News, which tried to argue Dodd knowingly exempted AIG, and it proved a political disaster in his home state of Connecticut, where he faces a now-tough re-election fight next year.
The Hartford Courant responded with a headline, "Dodd's Flip Flop," and some are urging the senator to step down.
"Unless he decides not to run, we are going to hear about this constantly for the next 18 months," Rick Green wrote in a column the Courant published Friday.
Something was clearly wrong at a Senate hearing on small-business lending last week, as witnesses expressed polar opposite views of reality.On one side were entrepreneurs complaining about the scarcity of credit. On the other side, bankers insisted they had not cut back on lending.
"Clearly, there's a disconnect on Main Street about what is being said and what's actually being done," said Bob Cockerham, the owner of a chain of New Mexico car dealerships. He also said his bank had cut the line of credit he needed to buy new cars.
Two seats away at the witness table was David Rader, Wells Fargo & Co.'s executive vice president for Small Business Administration lending, who described his company's efforts to increase SBA lending and expand its small-business lending staff. Rader insisted that Wells had not cut its credit lines and was actually ramping up small-business lending.
That was news to Cockerham. "But my bank is Wells Fargo," he said.
He argued that he had never missed a payment but had been told by his lender that he could no longer make use of his long-standing lines.
Guy Williams, the president and chief executive of Gulf Coast Bank and Trust Co. in New Orleans, pinned some of the discrepancy on bank regulators, saying steep assessments from the Federal Deposit Insurance Corp. and changing conditions for Troubled Asset Relief Program funds will drain his bank of capital it would plan to lend.
"Unfortunately for our customers, we will have to slow our loan originators this year and may also have to reduce originations in 2010," he said. "The changes which have occurred and those that are expected in the near future will make further increases in our lending almost impossible."
Nash Joins FDIC
The FDIC has hired Paul Nash as deputy to the chairman for external affairs, a new senior position.Nash, a former lobbyist and counsel for Verizon Communications Inc., will oversee the agency's legislative initiatives and be a point person for outreach to bankers. The FDIC said he will set up a special advisory committee to examine issues unique to community banking.
Nash had been executive director and counsel to Verizon since 2001. Before that he had been a legislative assistant to Sen. Tim Johnson.
Andrew Sandler and Benjamin Klubes, two financial services enforcement lawyers, are joining forces with Buckley Kolar LLP to form a financial services law firm called BuckleySandler LLP.Sandler and Jeremiah S. Buckley will serve as co-chairmen of the firm, which will provide enforcement, litigation, regulatory, public policy and transactional services. It has offices in Washington and Los Angeles and plans to open one in New York.
Sandler was the head of the consumer financial litigation practice at Skadden, Arps, Slate, Meagher & Flom LLC, where he practiced with Klubes.
Sandler and Buckley also will run the consulting firm Corporate Risk Advisors LLC.