Next week a panel of Iowa lawmakers plans to question representatives of three Iowa banks that received money from the U.S. Treasury as part of the federal bailout enacted last September. The bank executives have been asked to appear before the Legislature’s joint Government Oversight Committee.
House Speaker Pat Murphy, a Democrat from Dubuque, casts it as a fact-finding mission. “(The banks) received millions of dollars in money that was handed out…The goal behind these was to take troubled assets and to make sure that people staying in their homes,” Murphy says, “and we just want to make sure that the focus is on middle class families.”
The money the banks received came from the federal, not the state government and Murphy acknowledges he and other state legislators don’t have much, if any, authority over how the banks have spent the money. “It’s amazing how much public pressure can be created if there’s some sunlight,” Murphy says. “…We want to make sure that the money they received, that they’re willing to discuss it with us and if they aren’t I think it’s a good reason for people to even inquire more if they don’t.”
The three banks received a total of $152.6 million from the federal government. “Listen, this is taxpayers’ money,” Murphy says. “We want to make sure that people are accountable whether it’s local money, state money or federal money,” Murphy says.
Senate Republican Leader Paul McKinley, a Republican from Chariton, says he hopes the committee hearing is “fruitful.”
“I’m not sure exactly what the purpose of that would be if they’re federal funds,” McKinley says. “…But we all want money to be spent wisely, and I certainly hope it will be.”
House Republican Leader Kraig Paulsen, a Republican from Hiawatha, is giving the hearing with the bank executives his stamp of approval. “Getting input from the private sector…I think is a grand idea,” Paulsen says.
The hearing is scheduled for next Thursday. Executives from West Bank, MidwestOne Bank and Heartland Financial have been invited to testify at the statehouse. The state banking superintendent has already agreed to testify, too.
Federal records indicate four Iowa banks have received federal bailout money. West Bancorporation got $36 million on December 8th. Heartland Financial got $81.7 million on December 10th. MidWestOne got $34.9 million on December 15th. North Central Bancshares got $10.2 million on December 19th, but its executives have not been asked to testify at the statehouse.