Bachus asks White House to explain role in ShoreBank bailout

A Republican lawmaker is asking the White House about its role in saving a Chicago-based community bank with ties to Washington. 

House Financial Services ranking member Spencer Bachus (R-Ala.) wrote a letter to President Barack Obama on Tuesday asking if the administration pressured several large banks that had already received federal bailout funds to provide enough funding to make ShoreBank eligible to receive federal funds. 

"The Obama administration's involvement raises very serious questions as to why the federal government is rescuing a politically connected hometown bank when hundreds of others are forced to close," Bachus said in a statement. 

A White House official said any questions regarding the Community Development Financial Institutions Fund are referred to the Treasury Department or to their bank regulator and those parties decide the matters. 

"As every story has said, White House officials have not met with ShoreBank regarding support measures for their bank, nor has the White House made asks of financial assistance to other financial institutions for ShoreBank," White House spokeswoman Amy Brundage told The Hill today. 

Bachus and Rep. Judy Biggert, (R-Ill.), ranking member on the Subcommittee for Oversight and Investigations, questioned a cash injection of $150 million from Goldman Sachs, Citigroup and GE Capital so ShoreBank could qualify for $75 million in Troubled Asset Relief Program funding.

ShoreBank is a well-known institution that is considered model for lending to middle- and low-income borrowers. 

The letter requests the White House to release all records of communication, including e-mails, phone calls and meeting records, related to the ShoreBank negotiations between the administration, ShoreBank representatives and any bank executives involved in the corporate bailout, including Lloyd Blankfein, Eugene Ludwig and the Promontory Financial Group. 

"There is no way a bank without ShoreBank's political connections would receive this kind of attention and these actions fully make the case as to why the government should refrain from subjective, ad-hoc bailout practices," Bachus said. 

To read the letter, click here. 

This story was updated at 4 p.m.