Banking Blog

Finance Blogs » Banking » FDIC sues former NFL star

FDIC sues former NFL star

By David McMillin · Bankrate.com
Friday, April 13, 2012
Posted: 3 pm ET

While Jim McMahon was a standout for the Chicago Bears in the 1980s, the former NFL quarterback did not go on to have such a strong career in the banking industry. The Chicago Sun-Times recently reported the FDIC is currently suing McMahon for his role in the 2010 failure of Chicago-based Broadway Bank.

Broadway Bank, like many other financial institutions, made some high-risk loans that came back to bite the bank and the FDIC's insurance funds when those loans weren't repaid. In McMahon's case, the lawsuit spells out that the Super Bowl-winning quarterback didn't display such exemplary leadership skills when he served on Broadway's Board of Directors. From approving a loan that lost the bank $19.5 million to missing important meetings, the lawsuit throws him in with many other executives at banks whose carelessness allegedly contributed to the economic slowdown, created hassle for account holders and cost the FDIC's Deposit Insurance Fund a lot of money.

This isn't the first lawsuit the FDIC has filed, either. According to Philip Shiskin at Reuters, the FDIC has filed 22 lawsuits over the past 18 months "targeting personal finances of former executives, their insurance policies, and sometimes their spouses' assets, in an attempt to claw back some of the money."

Still, if you think about the number of banks that failed over the past few years, 22 seems small in the grand scheme of collecting some of these funds. More than 400 banks have shuttered their doors since 2008, and I'm guessing there are more executives who should be held responsible for poor decision-making. Shiskin highlights that some critics argue that the FDIC has failed to make the extra effort to recoup some of the costs of these failures, citing the $95 million WaMu settlement. The FDIC initially stated that it was seeking up to $900 million in the damages from the most well-known bank failure of the past few years.

What do you think? Should the FDIC be more aggressive in holding banking executives accountable for their role in a financial failure?

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
66 Comments
jim
May 04, 2012 at 2:42 pm

Does anybody believe that somebody is going to jail here, does anybody believe any of this money will be recovered.
Nobody is going to jail, no money will be recovered, this story will start and end right here and now.

LINDA
May 04, 2012 at 11:37 am

OKAY MY 1ST COMMENT JUST REAPPEARED. THANKYOU

LINDA
May 04, 2012 at 11:35 am

HEY ! WHAT HAPPENED TO MY PREVIOUS COMMENT ? SOMEONE TOOK IT OFF. IF BANKS ARE RESONSIBLE FOR THEIR HIRING OF INCOMPETENT BOARD MEMBERS, THEN WE HAVE A LOT OF MONEY COMMING BACK FROM BARRACK OBAMA. BY THE WAY, ARE WE STILL SUPPORTING AND FEEDING HIS MOTHER-INLAW ?

linda trombello
May 04, 2012 at 11:21 am

WELL IF ITS OK TO SUE JIMBO THEN WE'VE GOT A LOT OF MONEY COMMING FROM BARACK "HUSSIEN" OBAMA . HE SO NARSSISTIC. HEY WHY DOESNT ANYONE COMPLAIN ABOUT HIS MOTHER-INLAW LIVING OFF THE AMERICAN PUBLIC BY LIVING IN THE WHITEHOUSE ?

Rich
May 04, 2012 at 9:26 am

Ymnot: Obama inherited the financial crisis from that great Republican, Dubya Bush. But nice try.

watchingyou
May 02, 2012 at 11:48 pm

The democrats are to blame for this, wow, here I thought it was the republicans in charge of the country when the housing market went belly up.

Ymmot
May 02, 2012 at 10:34 pm

Why is everyone blaming the banks for the financial mess this country is in when it was the Demoncrats with their coercive home loan policies that practically forced the banks and lending institutions to make loans to high risk borrowers (read designated minorities) who could never begin to pay back those loans, many of them with no money down, 100% financing which was unheard of before that time!

Lay all the financial trash and woes at the doorstep of Dodder and Frankfurter, those are the ones that should be in jail or lined up against the wall and shot!

Once again America you being mislead, run-a-muck and bamboozled by the complacent media and thieving politicians!

Robert
May 02, 2012 at 8:32 pm

I retired from banking after 45 years and have seen this old game played many many times in my career, (put someone famous on the board to sway votes)without knowing the difference between a debit and credit. Its called greed, and stealing, (pay me under the table) for my professional services. If more bankers and directors were put in jail for their actions this would come to a swift stop.

sheila
May 02, 2012 at 7:16 pm

Why was Jim Mahon chosento serve on the board of directors? He didn't have any skills concerning money. He was a football player and he was uneducated. Thats the only reason why he was appointed to the board. As a result,the banking institution paid a hefty price for thier ill mistake.

Randy
May 02, 2012 at 4:06 pm

I would say that if they're going to after ONE individual, then they MUST go after ANY AND ALL Senior Managers and/or Board Members of ALLLL of the FAILED banks/financial institutions....Make it even playing field...no pun intended...