Georgia leads the nation in bank failures since the 2008 financial collapse. Broun said bankers have told him that the Federal Deposit Insurance Corp. will continue to close Georgia banks until only 75 are left.
“I don’t know why,” he said during a campaign stop Monday. “Maybe because we’re a Republican state.”
The FDIC doesn’t close failed banks, spokesman David Barr said. That’s the responsibility of the state agency that chartered the bank — in Georgia’s case, the Department of Banking and Finance — or the Office of the Comptroller of the Currency for nationally chartered banks, he said.
Broun was an investor in a Carrollton bank run by his brother that failed in 2010. He said he was just a shareholder and wasn’t involved in the day-to-day operations.
Banks are being forced to write down performing loans, decapitalizing the banks, because of the mark-to-market accounting rule, Broun said. The rule requires banks to account for the current value of an investment, rather than the amount they paid, which proponents say gives a truer picture of their financial health.
Broun also blamed bank failures on federal laws like the 1977 Community Reinvestment Act, which bars lenders from discriminating, and the 2010 Dodd-Frank law regulating Wall Street, as well as political pressure the defunct liberal group ACORN put on banks to loan money to people who couldn’t pay it back.
State Rep. Chuck Williams, R-Watkinsville, a banker, said he’s not sure mark-to-market is a good rule, but regulator enforces it equally across the board. Most of the Georgia banks that went bust failed because they had too many residential construction loans on their books when the real estate market crashed, he said.
“I don’t know if there’s a targeting of any particular state,” Williams said.
State and federal regulators have closed 76 Georgia banks in the past four years, the most of any state. Only nine banks in Texas have failed since 2008.
Broun, an Athens Republican, is kicking off his re-election campaign this week with a bus tour of the 25 counties in his 10th District. He stopped at Harris Shoals Park on Monday, speaking to about 20 supporters, including Williams, Oconee County Commissioner Chuck Horton and Sheriff Scott Berry.
He said his JOBS Act bill, which would eliminate taxes on corporations and capital gains, would create millions of jobs.
“We’ve got to have policies like that instead of policies that destroy the free market economy like the (Obama) administration has put in place,” he said.