CHICAGO community development lender ShoreBank was teetering on the brink of bankruptcy yesterday as US authorities and Wall Street banks remained locked in talks over a potential financing package.
ShoreBank faces closure if it cannot meet a deadline today to secure the $125m (£86m) in funding it needs to avoid a government takeover.
Wall Street heavyweights Goldman Sachs, Citigroup, JP Morgan, Bank of America and Morgan Stanley have all pledged financial help to try and guarantee the future of ShoreBank, which has won plaudits from the likes of Presidents Obama and Clinton for its commitment to lending to low-income communities.
Chicago Congresswoman Jan Schakowsky at the weekend implored ShoreBank’s peers to come up with the goods. “The big Wall Street banks that caused this economic crisis received hundreds of billions of dollars in taxpayer bailouts,” she said. “It would be a tragedy for Chicago neighbourhoods if some of the chief beneficiaries with the greatest capacity to help end up riding off into the sunset while an institution that provides credit to underserved communities is allowed to collapse.”