Bob Johnson seeking bailout money
The Charlotte Business Journal reports that Bobcats owner Bob Johnson wants $1 billion in federal money for his Urban Trust Bank. He would use the money to create a new entity to help out servicers of subprime mortgages, and his bank would raise another $7 billion on its own. At first blush, the response to this news is predictable: Billionaire Bob wants a bailout? But I think there's a little more to this story.
I saw Johnson on a panel discussion earlier this spring. He was already talking about the potential disastrous effects of the looming mortgage crisis on poorer neighborhoods and in the African-American community. That's the target market of his bank. He says the money would be used to modify mortgages in those areas. If not, one could foresee entire neighborhoods of boarded-up, relatively new homes. It's alreay happening in some parts of northwest Charlotte. If the AIGs and JPMorgans of the world are getting federal money (and choosing not to tell the public what it's doing with the public money…imagine if the United Way said, "naah, we're not going to tell you where the money's going"), why not Bob?