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One of Those “Oh, You Gotta Be Kidding!” Stories

Bad or delinquent loans? Zero. Foreclosures? None. Money set aside in 2008 for anticipated loan losses? Nothing. … The bank even squeaked out a profit of $87,000. And its Tier 1 risk-based capital ratio was 31.6 percent, or more than three times higher than many community banks in Massachusetts. “We’re paranoid about credit quality,” Petrucelli said. The 62-year-old chief executive has run the bank since 1992.

Yet the FDIC has turned up the heat on Petrucelli’s bank, giving it an apparently rare “needs to improve rating,” for not making more risky loans under the Community Reinvestment Act. Here is how the FDIC puts it: “There are no apparent financial or legal impediments that would limit the bank’s ability to help meet the credit needs of its assessment area. The FDIC examiners also faulted East Bridgewater “for not advertising and marketing its loan products enough. The bank, which does not have a Web site, offers fixed-rate mortgages.”

read it all.

This bank is under the FDIC gun because they employed fiscally sound lending policies, refusing to offer loans to people who failed to meet the bank’s criteria for prudent lending. Oh, and the don’t have a website… and they didn’t blast adverts screaming about how cool were their financial tools… and they didn’t offer floating rates.

In other words, they did everything EXACTLY RIGHT.

So of course, the Feds want to spank their ass.

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