This CNN article reviews the issue of the Treasury giving out TARP funds to unhealthy banks. Many consider it bad policy to be helping these unhealthy banks while ignoring the safe-and-sound banks. OneUnited Bank was specifically mentioned:
Consider the case of OneUnited, a small Boston bank that was recently the subject of a federal enforcement action that questioned the bank's safety and soundness -- and was also the recipient of a $12 million TARP bailout.
The CNN article described some of the FDIC orders against OneUnited:
The FDIC ordered OneUnited to "sell all bank-owned automobiles," and to require that executives reimburse the company for any vehicles that had been purchased. The Boston Business Journal reported in November that the bank owns a 2008 Porsche sport-utility vehicle that is registered at the address of OneUnited CEO Kevin Cohee.
The FDIC also ordered the bank to stop paying for a beachfront house in Santa Monica that, according to the Boston Business Journal, was purchased for more than $6 million in early 2007 by a group that included Cohee and his wife Teri Williams, the bank's president.
In November I reported on the Cease and Desist Order that the FDIC issued against OneUnited. OneUnited has long been offering a high yield online savings account (see post), but in the two years since I started reporting on OneUnited, it has not built a reputation of a well-run internet bank. Many readers have reported problems with the bank's online application, the online banking and with their customer service. OneUnited's policy of crediting interest quarterly is another issue.