Word: banker
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Dates: during 1970-1979
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...Some bankers suggest that Lance's overdrafts violated the Federal Reserve Board's Regulation O, which limits borrowing by officers from their own banks to maximums of $30,000 for a home mortgage, $10,000 for educational expenses and $5,000 for other purposes. Even if legal, declared a Wall Street banker, the overdrafts were "a misuse of a portion of corporate assets because they were diverted to a purpose that serves the personal interests of an officer of the bank, rather than the depositors and stockholders...
Loans Few bankers thought Lance was wrong to seek personal loans from correspondent banks, which provided services for the banks he ran in exchange for interest-free accounts. Said one Florida banker: "He's going to go to a bank where he does business. It's as simple as that." In fact, an ABA 1976 survey found that about 93% of the bankers replying routinely offered personal loans to corresponding banking partners like Lance...
...some bankers criticized Lance for so obviously shifting his bank's correspondent business along with his personal loans. Lance has denied that he made the switches in order to get loans for himself which would be illegal. Still, said a Los Angeles bank officer, "no serious banker could look at the pattern of his bank's opening up correspondent accounts and Lance's getting personal loans and believe the sequence was coincidental." Added a New York banker: "The use of compensating balances to buy favors for yourself is a rotten practice but very common"-and one that...
Collateral Bankers are undisturbed that banks granted Lance loans for little or no collateral. Said a banker in Atlanta: "Bert was known and highly regarded. Collateral is important, but reputation and character are just as important." Yet some bankers noted that Lance's lenders were concerned that his collateral-mostly shares in Atlanta's National Bank of Georgia-was insufficient. Manufacturers Hanover Trust Co., for example, which loaned Lance $2.6 million in 1975, sent him eight letters seeking verification of the collateral and once demanded that he increase it. Bankers were aghast that on one occasion Lance used...
...such abuses, Congressman St Germain would make it illegal for a banker to borrow from a correspondent bank under any circumstances. Bankers disagree vehemently on this point. Complained the ABA's Smith: "That may look good on the page of an economics textbook. But it would be disastrous for good, competitive banking. After all, bankers need full and speedy access to credit...