Published in CommPRO.biz 2013.09.04

Too Small to Ignore?

It appears that Darryl Layne Woods may spend a year in jail and have to cough up a hundred grand in fines. Woods is the majority owner and former Chairman and CFO of the Mainstreet Bank in Ashland, Missouri; the bank has branches in Bunceton and Prairie Home. The three small towns with a total population of a little over 4,300 are in the Columbia, Missouri area. In addition to likely jail time and the fine, Darryl has been barred from ever again having any role in banking.

You see when the government was passing out money to support the banking sector following the crash, Mainstreet was given a little over a million dollars. Darryl “invested” about a third of that in a luxury condo in Florida. When asked what they had done with the money, the bank was not totally forthcoming about the condo. Darryl signed that document and is taking the fall. Part of the plea deal absolved his wife from any involvement. The bank will, of course, have to pay back all of the TARP funds if they haven't already. It turns out that the bank sold the condo in Florida this spring and made a few bucks on their investment.

A statement on the Mainstreet website from the bank’s Board seems to indicate that it’s all some big misunderstanding and that the bank had been making real estate investments of this nature for some time. The government claimed that the Florida condo was intended for use by Darryl and other bank executives.

Mainstreet Bank has been around for ninety years. It’s the kind of community bank that’s vital to small town America. Darryl Woods is 48 years old and listed as “majority owner.” That could mean anything from 51% up; a local newspaper just referred to him as the bank’s “owner.” We would guess he was used to doing whatever he felt like and this time he went too far, or was careless with the paper work.

It’s hard to understand how this differs from the banks taking billions in TARP and subsequent billions from the Federal Reserve while somehow managing to pay $140 billion in bonuses to their executives in 2009 alone. That’s the same year Darryl Woods spent $381,487 to buy a condo in Florida. Did the big banks just do a better job filling out paper work than the Mainstreet Bank in small town Missouri?

Last week (2013.08.27) Bush era Treasury Secretary Hank Paulson, the architect of TARP, said he was very disappointed with the bonuses. That would seem to be about five years too late. Paulson went on to claim that he could not have made bonuses a part of the deal for TARP funds or the banks would have backed away. If that was true, why were those same big banks desperately sucking up hundreds of billions from the Fed month after month even after they took the TARP funds? The Mainstreet Bank folks -being from Missouri- have to be saying, “Show Me.”