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BofA Loaned Insiders $624M as Credit Froze Up

By Neal Colgrass,  Newser Staff

Posted Mar 22, 2009 8:01 PM CDT
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(Newser) – While credit markets were frozen last year, forcing thousands of Americans out of business, Bank of America lent insiders more than $624 million—more than doubling the amount loaned to insiders the previous year, the Charlotte Observer reports. Recipients' names were not disclosed, but most of the money likely went to bank directors or their companies, experts say. At the same time, the feds gave BofA $15 billion, part of a planned $45 billion bailout.

The BofA's $358 million jump was the biggest increase in insider loans in the country— a 135%  hike from a year earlier compared to an average 5.7%. JP Morgan topped the list, with nearly $1.5 billion in insider loans. Advocates say transparency is needed to avoid abuse, but not all agree. "I don't think it matters if the loan is to the bank's board of directors or somebody else," one banking professor tells the Observer.

Pedestrians walk past a Bank of America branch bank in midtown Manhattan July 21, 2008 in New York City.
Pedestrians walk past a Bank of America branch bank in midtown Manhattan July 21, 2008 in New York City.   (Getty Images)
Signage is visible atop a Bank of America branch office April 6, 2004 in Chicago, Illinois.
Signage is visible atop a Bank of America branch office April 6, 2004 in Chicago, Illinois.   (Getty Images)
A Bank of America branch office is shown Sunday, Jan. 25, 2009 in New York.
A Bank of America branch office is shown Sunday, Jan. 25, 2009 in New York.   (AP Photo/Mark Lennihan)
In this Nov. 25, 2008 file photo, pedestrians walk through New York's Times Square under a glowing Bank of America marquee.
In this Nov. 25, 2008 file photo, pedestrians walk through New York's Times Square under a glowing Bank of America marquee.   (AP Photo/Craig Ruttle, file)
In this Feb. 11, 2009 file photo, Bank of America Chairman and Chief Executive Officer Ken Lewis testifies on Capitol Hill.
In this Feb. 11, 2009 file photo, Bank of America Chairman and Chief Executive Officer Ken Lewis testifies on Capitol Hill.   (AP Photo/Haraz N. Ghanbari, file)
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COMMENTS
Showing 2 of 2 comments
Zebraone
Mar 25, 2009 11:25 AM CDT
I'm leaving the bank of italy for another bank~~~BOA is the biggest bunch of phucking thieves on the planet~~~~~ After our afro "cic"
JonmarkP
Mar 23, 2009 3:16 AM CDT
Of course it makes no difference whether the loans are made to someone on the Board of Directors. Banks are run by really honest people like Jimmy Stewart.

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