Park National Bank didn’t fail. It was ambushed.
Federal banking regulators have spent the year pouring tax money into banks laid low by greed and avarice, and then chose to kill a community bank that represents every virtue you’d hope to find in such institutions.
It’s infuriating and it’s insane.
Park National Bank – days from closing on the $600 million in private capital that the FDIC demanded be raised – is dead. Simultaneously, the FDIC is handing over to another bank a reported $2.5 billion to take on Park National’s assets. And this makes sense how?
Friday morning, U.S. Treasury Secretary Timothy Geithner was on the West Side awarding Park Bank Initiatives, the nonprofit community development arm of the bank, $50 million in tax credits for its remarkable work on affordable housing. Simultaneously, the federal regulators were hours away from driving a stake through the heart of what many considered the best community bank in America. And this makes sense how?
Plainly, it makes no sense. Plainly, there has been one gargantuan foul-up across the vast federal bureaucracy. That error in judgment has robbed Oak Park and Austin and Maywood and Englewood and Pullman and disadvantaged neighborhoods and towns in California, Arizona and Texas of a community bank that brought banking services to communities the feds couldn’t, with all the carrots and sticks in their arsenal, ever arm-twist other banks to serve.
Park National was in those communities because its chairman, Michael Kelly, saw the good that a committed, connected, profitable bank could make in tough neighborhoods. This is a bank that in 2007 and 2008 donated nearly a third of its profits ($55 million in donations) to fund affordable housing programs, launch charter high schools, rehab foreclosed homes. This is in addition to efforts such as the bank’s $22 million interest-free construction loan to Christ the King Jesuit College Prep, now nearing completion in Austin.
In the 28 years since Mike Kelly, the bank’s sole owner, took over the discredited Oak Park National Bank, he invested heavily in the village surrounding 11 Madison St., too. Slow down and look at the bank buildings he put on Austin Boulevard at Madison and on North Avenue at Austin. These aren’t ticky-tacky bank branches. These are substantial symbols of hope and determination at key intersections that link Oak Park with the West Side.
Read the stories people tell in this newspaper of Park National’s involvement in critical community groups across our villages. Park National wrote checks, sometimes huge checks, to fund important efforts. Its execs were working members of nonprofit boards. The list doesn’t stop: Sarah’s Inn, the Children’s Clinic, Hephzibah, the Hemingway Foundation, Thrive, PADS, the hospitals, the colleges. The bank was, by far, the local United Way’s biggest donor. And these are just the recipients we’ve found in recent days.
Why, you wonder, didn’t you know this? Simply because Mike Kelly insisted that every effort was silent. Always.
Park National didn’t make subprime loans, didn’t get caught up in exotic debt instruments, didn’t treat its execs to junkets. This modest bank had everyone’s back, did everything right.
And still it got hammered.
Repercussions of this travesty of justice are immediate. They’ll be lasting. This void won’t be filled.