Update | 4:45 p.m. U.S. Senate candidates David Hoffman and Cheryle Jackson have responded to this development. Check our home page soon for a full story.
Update | 3:15 p.m. The consent order confirms that, as part of the agreement, Broadway Bank will need to hire a third party, approved by the FDIC, to study each senior executive at the bank.
The agent will "develop a written assessment and analysis of the bank's senior executive officers for the purpose of providing qualified management for the bank."
This language would exclude Giannoulias, since he is not currently an officer at Broadway.
But some of the bank's investments with major losses were made during his tenure at Broadway, so we're still waiting for word from him or his campaign about whether he has been notified of an investigation into his role.
Meanwhile, David Hoffman's campaign has been uncharacteristically slow to respond to this story. I wonder what the folks there are cooking up.
If you would like a copy of the consent order, I can send it by e-mail. The FDIC formatted it in TIF, not PDF.
Update | 2:55 p.m. David Barr, a spokesman at the Federal Deposit Insurance Corporation, sent me a copy of the consent order signed by both the FDIC and the state's Department of Financial and Professional Regulation.
But he would not address whether Giannoulias is involved in an investigation.
"We don't confirm or deny whether or not an investigation is going to be ongoing involving an open and operating institution," Barr told me.
Sue Hofer, a spokeswoman at the Illinois Department of Financial and Professional Regulation, told me she could not comment on a consent order until she receives a copy signed by all three parties.
Once she receives it, she says, it will be posted on the department's Web site in a page related to the agency's enforcement actions.
Original post: Democratic U.S. Senate candidate Alexi Giannoulias has responded to new regulations imposed on his family's Broadway Bank that could include an investigation into senior executives at the business.
Giannoulias, Illinois' treasurer, was a vice president of the bank before winning his seat in 2006.
Broadway executive Kaushik Pancholi sent a letter to bank members today announcing a consent order with the Federal Deposit Insurance Corporation and the Illinois Department of Financial and Professional Regulation.
"The bank will be taking a series of steps, including raising new capital, reducing problem assets, and enhancing certain of our operational and management systems," Pancholi wrote in the letter.
Crain's Chicago Business reported the consent order earlier this afternoon.
Kati Phillips, spokeswoman for the Giannoulias campaign, sent the Current a statement from the candidate by e-mail.
"In the midst of a deep recession brought on by bad decisions in Washington and lax oversight on Wall Street, hundreds of community banks are struggling, and Broadway Bank is no exception," Giannoulias said. "I have not been there for nearly four years. My understanding is today’s agreement gives the business a plan for moving forward.”
Phillips did not immediately respond to whether Giannoulias has been notified of an investigation into his role at the bank.
Louis Pukelis, a spokesman at the Illinois Department of Financial and Professional Regulation, said he is not privy to Division of Banking issues and referred questions to spokeswoman Susan Hofer.
I'm waiting for a call back from her and a spokesman at the FDIC and will update this post as I receive further information.
Thom Karmik, spokesman for Giannoulias rival David Hoffman, said the campaign could have a response soon. Hoffman has been attacking Giannoulias for troubles at his family's bank, including widely reported loans to convicted felon Tony Rezko.
Consent orders are governed by federal and state laws and are generally voluntary. They impose a variety of requirements on financial institutions, and they have become more numerous as community banks across the country have struggled in a dour economy.
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