Is FDIC - Really A Predatory Lender

[Mike Kennedy]

http://www.mortgagenewsdaily.com/7212008_FDIC_Predatory_Loans.asp


The Wall Street Journal reported Monday morning that the Federal Deposit Insurance Corporation (FDIC,) rather than being part of the solution to the subprime mortgage crisis, was actually among those institutions that caused it.

 

[Terrel L. Shields]

I agree. During the Penn Square collapse of the early 80's, it was clear that bad loans were out of control. FDIC had not dealt with anything like it since the early 70's when Franklin Bank failed. As the oil field began to suffer under lower prices, a large bank in Midland (First Natl of) well-established, funded, large and had some bad oil loans. There were papers written about how the FDIC jumped the gun and liquidated them despite the much stronger position they were in than Penn Square. FDIC was spooked by that time and put a lot of banks to sleep

Ditto years ago for the RTC. They shot a lot of wounded that would otherwise have survived.