Giannoulias family's bank on federal watchlist
March 4, 2010 (CHICAGO) (WLS) -- Some community banks are struggling in this economic downturn. This week, U.S. Senate candidate Alexi Giannoulias said his family bank is one of them.
It is on a federal watchlist of problem banks along with many others.
The Independent Community Bankers Association told ABC 7 Thursday that virtually all of the group's member banks are under some stress because of falling real estate values. But he acknowledged the Giannoulias family-owned bank apparently is among those facing the most dire circumstances.
Despite hearing the name Broadway Bank in news reports, many long-time customers have not considered moving their accounts. Restaurant owner Jake Moody, a 30-year customer, likes the personal service there.
"It's kinda nice when you go into a bank and everybody says good morning and uses my name," said Moody.
The Broadway Bank, owned by the Giannoulias family, is on the federal government's watchlist of problem banks. It reportedly lost hundreds of millions of dollars in the recent collapse of the commercial real estate market.
US Senate candidate Alexi Giannoulias, who was the chief loan officer at Broadway before his 2006 election as Illinois treasurer, says his late father's legacy is tied to the bank's fate.
"It's difficult. He really believed in this business, and I'm going to try to make him proud by running for office, and my brothers are working hard to keep the bank going," said Giannoulias in an interview with WTTW-TV.
Of the estimated 8,000 community banks in the United States, 702 are on the government's watchlist for serious financial problems. If Broadway or any of the other problem banks fail, the vast majority of customers would be protected by federal deposit insurance.
Customer Bernard Djahouri actually takes comfort in the fact the bank is still owned by the Giannoulias family.
"Since they mention the owner's name, I think that's the reason why I'm not worried too much," said Djahouri.
Republican US Senate candidate Mark Kirk is making Broadway Bank a US Senate campaign issue. He alleges the bank's problems were caused by reckless and risky loans authorized by his Democratic opponent four-to-eight years ago.
Thursday, Mayor Richard Daley defended Alexi Giannoulias, saying community banks everywhere are in trouble because of falling real estate values.
"All these smaller banks are in difficulties. They have had loan problems and also the decline of the real estate value. If you bought a home for a million and now it is worth $250,000 or $400,000 , Who really picks that up?" the mayor said.
The Broadway Bank has been ordered to come up with $80 million in new investments this spring or face a takeover by federal regulators. The more the bank is the subject of campaign-related news stories, the more difficult it is going to be to raise that money.
politics, charles thomas
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