Regulators! …And the Bad Loans.By
Former NC-11 Congressman Charles Taylor was in the news this week, as his bank, Blue Ridge Savings, went belly-up.
Former Rep. Charles Taylor blamed increased federal regulations and a bad economy for Blue Ridge Savings Bank closing last Friday.
But regulators said Blue Ridge Savings Bank had failed to keep enough capital last year after being cited in late 2008 for poor management and a large number of bad loans.
The bank was declared insolvent last week, as its assets and deposits were taken over by the Thomasville-based Bank of North Carolina. Blue Ridge’s 11 branch offices opened Monday for business under new ownership.
It’s not surprising that Mr. Taylor would deflect responsibility for the management of his company. What’s surprising to me is that Taylor and managers failed to save the bank even after warnings from regulators about their dire financial situation.
Taylor placed $2 million into capital in September 2010, but failed to place a scheduled $3.7 million into capital at the end of the year.
He claims that regulations kept him from putting the money away, but no amount of avoiding responsibility can protect you from simple truths. If you put all your eggs in the construction/development basket, then you’re going to be in trouble when the market heads south.
To his credit (or perhaps because he didn’t want to deal with the additional associated scrutiny), Taylor and his bank did not ask for a TARP bailout. Also, it’s good to know that everyone with money in the bank was protected by the federal government, the real safety net when financial institutions fail.