

The (Real) Bank of America – $3 trillion portfolio of loans on its books - ThomPete
http://www.politico.com/magazine/story/2015/01/federal-loans-bank-of-america-113920.html#.VKxsDmTF89Y

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ThomPete
_" The riskiest programs often reek of politics, producing fiascos like the
Bush-era super-ferries, which benefited a firm led by Republican ex-Navy
Secretary John Lehman, or the similarly disastrous Clinton-era MarAd loan to
modernize a shipyard near Boston, a pet project of the late Democratic Senator
Ted Kennedy. Credit programs, especially the more obscure ones, tend to have
well-positioned benefactors. South Dakota Republican John Thune, a former
railroad lobbyist who is about to chair the Senate Commerce Committee, once
pushed through a major expansion of a railroad loan program on behalf of his
former employer, while Michigan Democrat Debbie Stabenow has protected those
dicey loan guarantees for biorefineries as chair of the Senate Agriculture
Committee.

But if too much risk can be a problem, not enough risk can also be a problem,
as federal credit ends up subsidizing safe transactions, crowding out private
lenders and helping people who don’t need help. The Ex-Im Bank has defended
itself by highlighting its 0.2 percent default rate, which only raises the
question of why a government entity is needed to make such low-risk loans to
corporate behemoths like Boeing and General Electric. The same question could
apply to the Overseas Private Investment Corporation’s reliably profitable
financing for U.S. firms building fancy hotels and power plants abroad. If the
deals are low-risk layups, why is Uncle Sam involved?_

