The Columbian reports on the findings of an audit concerning the failure of Bank of Clark County. The whole article is worth a quick read if you follow the financial meltdown, because the FDIC during the Bush administration appears to deserve some of the blame. But so do the “best and the brightest” of Clark County’s bidness guys ‘n gals, as they got caught in a death spiral of declining property values.
The report lays the bulk of the blame on bank management, which in several instances ignored the FDIC’s warnings. In its 2008 examination, FDIC examiners discovered the bank had failed to provide current appraised values on at least 11 of its loans, causing regulators to underestimate the bank’s need for backup funds.
“They were hiding appraisals — that’s pretty damning stuff,” said Scott Jarvis, director of the Washington Department of Financial Institutions, on Thursday.
One thing that still gripes me about this case is how certain bank customers were tipped off about troubles at the bank, and others were not. What’s troubling is that it appears, from best I can tell, no laws were broken.
It may be legal, but that doesn’t make it right. The local bidness guys ‘n gals ran this bank into the ground in their effort to secure huge profits from excessive development that was not justified by population growth nor demand. When the bubble burst they were screwed, as were customers who didn’t get the word to bail.
You’d think someone would do something, in addition to an audit. At the very least releasing insider information to some customers and not others should be illegal.