WASHINGTON, D.C., Jan. 21 – It was a turnstile of surreal moments for Mike Kelly in Room 2128 of the Rayburn House Office Building.
On the witness panel at a Congressional hearing over the federal takeover of his banks, he’d made his peace with the past.
The shy banker who on Oct. 30 became the poster child for government irony spoke up almost three months later and told what happened to his franchise. In increasingly stronger sentences, he advised a House subcommittee on what he didn’t want to see in federal treatment of other community banks.
Just a week before the historic Jan. 21 hearing, speculation had run high that the FBOP Corp. witness on the subcommittee panel would be someone other than the Oak Park company’s CEO. Yet Kelly made it to Washington. And the attention-averse philanthropist was holding up through the present.
It was noon Eastern time, and the two-hour first take of the hearing had just ended. In another hour, the House financial services subcommittee would reconvene to hear testimony from three federal regulators, one representative each from the Treasury department, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp.
Kelly stared and shook his head as three rows of supporters from Austin and Oak Park filed out of the House chamber, most of them scurrying to other stops on Capitol Hill before the mid-afternoon call to board the bus. They’d arrived a little after 4 a.m., after a 13-hour, 704-mile ride from the West Side of Chicago.
Looking for his wife and an FBOP colleague, he eyed the door himself but was gracious about interruptions. Kelly nodded to three people with bulky cameras and didn’t wince to take questions, in turn, from two people with skinny notebooks. One reporter he thanked, and with a smile asked a question of his own: “So you, you were on the bus?”
Just when the public presence of Mike Kelly had reached a point that couldn’t have been predicted, it got weirder yet.
“You can come back, can’t ya?” the West Side’s other no-nonsense white guy, Bob Vondrasek, asked. “It’s not like you’re barred from banking, are ya?”
Now, Mike Kelly had to look at the future from a point he didn’t appear to have imagined.
Blinking, the 60something River Forester replied to the 70something former Oak Parker:
“I can’t tell you. I don’t know about that. I, I honestly don’t know. I’d have to check.”
The bottom line on banking censures
OAK PARK, Jan. 18 – Two days before the bus left for Washington, Wednesday Journal started checking into whether Kelly could be facing any censure in addition to the loss of his nine banks.
News archives are rich with bankers told they can’t be bankers anymore. But, unlike Kelly’s demise because of shares in government-secured entities going south, those stories all ring of calculated wrongdoing.
Michael Iannacconne, a financial consultant who lives in Oak Park and who in the last decade helped raise capital for FBOP, detailed the four conditions under which regulators could pursue someone:
“If the regulators find an executive, loan officer or director acted in an unsound manner, then they can ban them from banking.”
“If the regulators feel the executive officer/director dividended funds from the bank to shareholders and this hurt the bank from a capital perspective the regulators could demand the shareholders put the money back.”
“If the regulators found fault with the directors in violating any banking rules which caused the bank to lose money and reduce its capital then the regulators could force the directors (who are personally liable) to match the monetary damage caused by the violation and contribute it to capital of the bank.”
“If fraud and or other laws are broken, the regulators could pursue or have other authorities pursue criminal charges against the individual.”
According to this checklist, Kelly wouldn’t be facing censure.
“Though I would be surprised if Mike Kelly was pursued by regulators.” Iannacconne adds, “the arm of the regulators is long and strong.”
Faith, and out-of-the-box thinking
CHICAGO, Jan. 19 – During a town hall meeting at Friendship Baptist Church the night before the ride to Washington, one leader of the Coalition to Save Community Banking, the group that demanded and won the Congressional hearing, said a reversal of the takeover – the coalition’s other demand – wouldn’t be the only way the West Side could get its banker back.
“We don’t need the government to give Mr. Kelly his bank back. We have deposits. We need loans. We can give Mr. Kelly a bank,” the Rev. Marshall Hatch, of New Mount Pilgrim Missionary Baptist Church, preached to a sanctuary filled with Kelly fans.
Logic, and plain talk
ON THE BUS, Jan. 22, 2:30 a.m. – As Spirit Tours motor coach #787 was crossing from Indiana back into Illinois, passengers awake near the end of the return trip were taking stock of their effort.
“Where is our money right now? If we haven’t moved our money, what have we accomplished?” Austin resident Diane Rogers asked.
OAK PARK, Jan. 22, 10:20 p.m. – Bobbie Raymond, a coalition member who’d flown to Washington for the hearing, was in her living room reviewing what-ifs.
“If we knew tomorrow that Mike had a bank again, wouldn’t most people we know put their money right there? I think they would.”
MAYWOOD, Jan. 23, 2:15 p.m. – Jacqueline Reed, founder of Westside Health Authority, Austin’s largest nonprofit, was reviewing what she knew about the man she says empowered neighborhood after neighborhood.
“Mike was a philanthropist, but he was first and foremost a banker. Mike has to get back to banking. He has to. He’s a banker. How can he be a banker without a bank?”
One way to imagine the future
WASHINGTON, D.C., Jan. 21 – Told that an initial and general look at standards for banking censures showed no apparent demerits for him, Kelly paused, started to smile and said, “Interesting. That’s very interesting.”
Asked if he’d heard Rev. Hatch’s scenario, Kelly shook his head. Told about the preacher’s the-hell-with-the-government-making-this-happen plan, Kelly paused longer and smiled all-out.
“That, that is good to hear. Thank you.”