Obama considering the Mother of failed sub-prime lenders for Secretary of Commerce position
By Uppity Woman on November 20, 2008 at 1:25 PM in Allison Davis, Chicago, Chicago politics, Cullen Davis, Current Affairs, Economy, Housing & Housing Crisis, Penny Pritzker, Tony Rezko
If you are surprised by this appointment consideration, please know that I am not. And if you don’t know who Penny Pritzker is, you can count on me to refresh your memory.
Penny was Barack Obama’s national campaign finance chair and now she would like to become Secretary of Commerce. Well I suppose we should all be grateful that she hasn’t been tapped as Secretary of Treasury, considering she owes the Federal Government nearly a half billion dollars in restitution for her seized Superior Bank in Illinois.
Yes, my friends, Penny Pritzker, the Mother of subprime lenders, former owner of the seized Superior Bank is on Barack Obama’s short list for Secretary of Commerce.
I am sure all those customers she screwed are thrilled. In fact one of them had quite a bit to say about Barack Obama and his relationship with Prizker right here on this radio show after ole Penny’s bank went under and left her with a large part of her life’s savings flushed down the proverbial drain. (Note: If Play doesn’t work, click on MP3 Stream link, you don’t want to miss this woman’s story)
I can assure you this woman wasn’t psychic when she expressed concern that Pritzker would become a member of an Obama cabinet. She just happened to understand the concept of “Show me who your friends are and I will tell you what you are“.
You might say that Penny was a Pioneer of sorts. After all, her Superior Bank folded like a plastic door in a cheap banquet room years before the rest of the dominoes fell.
You might even say that the Superior Bank was a boilerplate for what’s happening today on Wall Street. She avoided the rush, so to speak. Her bank failed in 2001. I discussed this here on April 4, 2008. So did plenty of other bloggers, including RBO. Of course, all of this was dutifully ignored by those bastions of integrity, MSNBC and CNN.
For those of you who need a refresher course, here are some clips from that non-fiction story:
The Pritzkers are one of the nation’s wealthiest families and heirs to the fortune created by the Hyatt hotels. Yes, Penny is a billionaire. So basically, Penny could squash me like a bug right now for writing this.
Among their other endeavors, the Pritzkers were the owners of Superior Bank in Hinsdale, Illinois when it was seized.
Yes, I did say seized.
Penny Pritzker, Barack Obama’s great Chicago (of course!) friend was a pioneer you might say! She was a failed subprime lender who set the tone all the way back to 2001. She did it before it was even in style.
Here’s a little press release from the Office of Thrift Supervision back in 2001:
OTS Closes Superior Bank FSB; Hinsdale, Ill. Thrift is Insolvent
WASHINGTON – The Office of Thrift Supervision (OTS) closed Superior Bank FSB, Hinsdale, Ill., today and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
The FDIC transferred the insured deposits and substantially all the assets of Superior Bank into a newly chartered, full-service mutual savings bank, known as Superior Federal, FSB, which will open for business on Monday morning. All depositors of Superior Bank automatically become depositors of Superior Federal, and will have immediate access to their insured funds. All 18 of Superior Bank’s Chicago metropolitan area offices will open for business Monday and will continue to offer full banking services, including online banking. Superior Bank’s loan production and servicing operations will also continue to operate normally.
OTS used its authority under the FDIC Improvement Act of 1991 to close Superior Bank when it found that the bank remained critically undercapitalized — that its tangible equity capital was less than two percent of its total assets. The bank failed to implement a capital restoration plan that it submitted to OTS on May 24 this year.
Superior Bank suffered as a result of its former high-risk business strategy, which was focused on the generation of significant volumes of subprime mortgage and automobile loans for securitization and sale in the secondary market. OTS found that the bank also suffered from poor lending practices, improper record keeping and accounting, and ineffective board and management supervision.
Superior became critically undercapitalized largely due to incorrect accounting treatment and aggressive assumptions for valuing residual assets. The bank also experienced significant losses during 2000 from its automobile lending program.
OTS has determined that Superior Bank is insolvent, having incurred losses that have depleted all or substantially all of its capital. OTS also determined that Superior Bank was no longer able to transact business in a safe and sound manner.
OTS notified the bank of its serious concerns in July 2000.
The bank was purchased by two families in 1988 — the Pritzker family of Chicago, owner of Hyatt Hotels and other interests, and the Dworman family of New York, with interests in real estate and financial services activities — and was operated through a complex network of holding companies.
In light of these findings, OTS determined that closure and the appointment of FDIC as receiver were necessary to protect the interests of the bank’s insured depositors.
As of March 31, 2001, the failed bank had total assets of $1.9 billion and total deposits of $1.5 billion. FDIC insures depositors’ accounts up to the statutory limit of $100,000.
Superior is the only bank that OTS has closed in 2001, and only the fourth OTS-regulated institution closed in the past five years.
The FDIC has established a toll free telephone number for customers of Superior. That number is 1-800-331-6306, and will be available until midnight tonight and then from 7 a.m. to 7 p.m. daily thereafter.
At the time of this seizure, it was determined that Penny Pritzker and her family owed $460,000,000 to the Federal Government. Yes, that’s right folks. Nearly a half a billion dollars. Gee, i wonder if that’s all paid back yet, don’t you?
Back in September, 2008, I discussed Penny and her siezed subprime lending institution yet again and so did RBO. I felt she deserved another go-around considering she certainly appeared to be a prime forerunner of today’s Wall Street Meltdown–and this didn’t seem to bother Barack Obama one bit:
You see, while Barack Obama is faking outrage over all the bankruptcies and bailouts, he doesn’t mention that a number of his top ten contributors are from Wall Street, including Goldman Sachs, Lehman and the JP Morgan Chase. He also fails to mention that one of the first subprime lenders to stick it to borrowers and have her bank seized is a woman named Penny Pritzker, who just happens to be Barack Obama’s campaign Finance Chair (as confirmed on April 3, 2008) and a potential Secretary of the Treasury in an Obama administration.
Power and Control blogger has this to say:
This is a long and complicated story about how Obama backers were behind the mortgage industry meltdown. It hast to start some where, so lets start with a well known Chicago name Penny Pritzker. It starts with a bank failure.
And now, Penny is being considered as Secretary of Commerce. Kind of makes you feel all warm and fuzzy, doesn’t it? Don’t you always have a warm feeling when you meet one of Barack Obama’s close friends?
But don’t worry. Penny is going to fix herself and her friends us up really well. After all, look how well she has looked out for the little people in the past.
I guess the main stream media didn’t think this Petty little Penny Pritzker Problem (say that three times fast) was important enough to look into back when some of us was being sooooooooo trivial about it.
Change You Simply Cannot Believe.
Additional links on this bilking of innocent people:
NY Times, December, 2001
FDIC Failed Bank Information – Superior Bank
OTS Closes Superior Bank FSB; Hinsdale, Ill. Thrift is Insolvent
OTS Announces Resolution of Charges Against Auditor of Closed Superior Bank FSB
Additional Uppity Coverage of this marvelous “choice” for Secretary of Commerce:
Barack Obama’s Finance Chairwoman and the Seized Superior Bank (April 4, 2008)
Obama’s Finance Chair – Failed Bank Owner Penny Pritzker and Wall Street Today (September 14, 2008
RBO: Penny Pritzker’s Problem (September 16, 2008)
by Ronald Scott
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