California National Bank a Los Angeles based bank seized by Regulators
Friday night regulators seized a Los Angeles based bank, California National. No fanfare, almost hidden in the Halloween revelry. I am outraged it is not front page news. This bank is the fourth-largest bank failure this year and no one is talking about it.
As soon as the regulators seized it, they sold it immediately to US Bancorp a Minneapolis based bank. How could this happen? All the tax payer money could not save this bank? I am outraged, where are the politicians? Where are the banking regulators?
California National Bank with $7.8 billion in assets and $6.2 billion in deposits, again how could this be allowed?
Well the answer is attributed to losses on securities issued by the giant mortgage companies Fannie Mae and Freddie Mac. As you might recall the government takeover made Fannie Mae and Freddie Mac stocks worthless. California National had $855 million in preferred shares of Fannie Mae and Freddie Mac stocks. California National bank had been working on trying to obtain money from the Treasury Department’s $700-billion financial bailout fund, but at the end of the day the Treasury Department did not come thru. How ironic is that? I look forward to your views on this subject.
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