GOP Rep. McHenry to probe: Where was Wachovia's bailout?

Charlotte ObserverDecember 30, 2010 

Republican Rep. Patrick McHenry is about to take on a new job watchdogging the government's bailout of the banking industry, and he's mapped out a few priorities.

Among them:

Straighten out a potential wave of cities defaulting on municipal bonds.

Re-examine the Dodd-Frank financial regulation overhaul.

And figure out why Charlotte-based Wachovia never got a bailout in fall 2008, when it nearly collapsed under the weight of bad loans and was sold to San Francisco-based Wells Fargo.

"We saw a very uneven response from the federal government," said McHenry, a Republican from Gaston County. "While some institutions were bailed out, others were left to wither on the vine."

It's a topic that's sure to strike a chord in Charlotte, which lost the headquarters of one of its major employers when Wachovia was sold, as well as the prestige and decision-making power that go with it.

Unlike many other major banks, Wachovia didn't receive federal bailout loans in 2008, prompting disgruntled shareholders and employees to wonder why the Charlotte bank was left out.

In an interview with the Observer on Wednesday, McHenry said the public hasn't been granted "a full understanding of what happened with the Wachovia decision."

"There's a lot more work and a lot more unanswered questions that we need to face," he said.

McHenry, 35, will chair the new Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs when he starts his fourth term in Congress next month. It's part of the Oversight and Government Reform Committee, which Republicans are reorganizing as they prepare to take over the House next month.

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