Banks Are Lending--to Their Own

The credit crunch is squeezing American businesses and consumers, except for the directors, top executives and other insiders who have loans from their own banks totaling $41 billion.

We learn this from the Charlotte Observer, which reports: "At Charlotte-based Bank of America, those loans more than doubled last year, to $624.2 million--the biggest dollar jump in the country. The largest of them likely went to three directors or their companies. The surge came during the third quarter as credit markets froze, the government prepared to infuse banks with billions in tax dollars and the board approved the purchase of troubled Merrill Lynch.

"Bank of America ranked fourth on the list of biggest insider lenders. At the top was JPMorgan of New York, which held $1.48 billion in insider loans, mostly by directors or their companies."

This hyperactive insider lending raises all kinds of questions about the true condition of the institutions that are now about to receive another huge bailout by the Administration's plan to get toxic assets off their books.

But it also raises a question about journalism as well. Why does a story of this significance come from a Charlotte reporter, Stella M. Hopkins, part of the McClatchy chain, rather than from the journalistic centers of the financial and political universe in New York and Washington?

The McClatchy papers are in small to medium-sized but fast-growing communities, and they often break stories that the metropolitan behemoths overlook. Old-fashioned journalism seems to be alive and well on Main Street.