Local banks receive $200M in stimulus

January 29, 2009 5:25:06 AM PST
As the government gets ready to spend more than $500 billion more of your dollars, we wanted to know about the hundreds of billions already spent. Four Houston banks got more than $200 million from the first stimulus package. [SIGN UP: Get headlines and breaking news sent to you]

Mohammad Javad was never in line for federal loan money. He owns a check cashing and pay-day loan store in southwest Houston, but before he ever gives even a small loan he wants to know what it's for.

"That's my money. I want to know I can get my money back and that it will be used for something good," said Javad.

So if he asks about his money, then we wanted to ask the four Houston banks that are spending your money.

"We will end up loaning all that money by the end of the quarter," said Graham Painter of Sterling Bank.

Sterling Bank got $125 million tax dollars in December. They were happy to tell us their bankers loaned most of it already, will loan more this quarter and financed home mortgages with the rest of it.

"It still has to be paid back, so it's not free money. But to the extent that we can loan it, get it back, loan it again, get it back, loan it again, get it back and give it to the federal government. Everybody wins," said Painter.

Metro Bank got $45 million less than two weeks ago.

"We're looking at options," said George Lee of Metrocorp Bankshares.

They will likely loan more, but they said making fast decisions is bad for you and them.

"I don't think it's wise to get the money last week and start making loans today," said Lee.

Encore Bank got $34 million, but told us SEC rules prevented them from speaking with us.

Patriot Bank is headquartered in Houston and got $26 million of your money. There's no requirement they or any bank have to tell you or me what they intend to do with your money and Patriot didn't. The CEO told us through a secretary that he wasn't interested in speaking to us.

Houston Congressman Al Green, who serves on the committee who wrote the first stimulus, said silence doesn't sit well with him.

"We want to know how the money was spent. Not that the money went to a given bank, but whether that money actually produced additional lending," said Rep. Green.

Green is pushing a law that would force banks to tell us what they're doing with the money. As it is now, no one knows where the money is going, which doesn't make sense to Mohammad Javad.

"I'm not happy with that. That's my money," said Javad.

It's your money, too. By the way, when it comes to the new stimulus voted on Wednesday, President Obama promises to show you where it's going on a website that's currently being set up.

The two Houston banks that spoke with us said they did not need the money. They tell us it was too good a deal for them and their customers to pass up.

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