I have this quaint notion in my head that it is desirable for people in positions of authority to make decisions based on merit and not personality. For example, the referee judging whether a basketball player has committed a “traveling” violation should not be influenced by the fact that the player is Michael Jordan. The University of Illinois should admit students based on their academic performance and promise, not whether their parents have political connections to the chancellor. And officials of the Federal Deposit Insurance Corporation are obligated to decide how to dispose of a failing bank without reference to the non-banking virtues of its owner. This ideal is hard to honor in practice, but I am inclined to applaud rather than berate any official who does.
Of course, applying the principle is exceedingly difficult when the individual at the core of the situation is virtuous and generous, such as Mike Kelly, the sole owner of the recently failed banking business, FBOP Corp. He has been a large supporter – both with his wealth and his talents – of deserving, nonprofit organizations in our community.
So maybe it should not be surprising that the FDIC has become the villain in the reorganization of Mr. Kelly’s banks. But as far as I can tell, the FDIC has fulfilled its role – the protection of depositors, not bank owners or the many good causes that they might finance. If anyone wants to demean the FDIC, it is necessary to overlook its leader, Sheila Bair. She has been the most outspoken of all government leaders on behalf of homeowners who are delinquent on their mortgages, and the thousands of FDIC employees who do conscientious work on a mission they believe in – the protection of deposit holders. Why should we presume that the intentions of our nonprofit leaders in the western suburbs of Chicago are more pure than those of an important nonprofit in Washington, the FDIC?
The other supposed villain in this drama is U.S. Bank, which agreed to take on responsibility for FBOP’s banks. This is largely a faceless bank for most local citizens, and it will likely not be as generous with local causes as FBOP has been. But as the sixth largest bank in the country, U.S. Bank has conducted its business in a cautious manner, and, unlike many of its peers, did not need the government to save its skin. If all the big banks had conducted themselves as well prior to the recent financial crisis, there would not be so many of us looking for jobs or wondering why our investments have so little value. U.S. Bank should be applauded, and the FDIC has done as much by asking it to assume responsibility for FBOP. If citizens of the western suburbs are concerned about the local focus of their bank, they will soon flock to a local institution, of which there is at least one, even after the demise of FBOP and Corus.
The FDIC and FBOP are not the cause of the problems that some local charities may now face with the absence of Kelly’s bank. In short, they have done what they are supposed to do. And I have a feeling that Mr. Kelly, given the large man that he is, would say the same.
Dale Sorenson, a resident of Oak Park for 28 years, worked for First Chicago Bank for 20 years and has been a consultant for banking issues for 10 years.
