From 2008 to 2015, the Federal Reserve, through its Federal Deposit Insurance Corporation, allowed an unregulated company, GeoBank, to take a $50 billion payday lender out of business.
The Fed said the lender, GeoCards, failed to provide sufficient collateral and failed to meet its standards for lending, and it fined GeoCard $1.1 billion for its actions.
GeoCarding was run by a company called GeoBanks and had a history of misbehaving with customers and lenders, according to a 2009 report by the House Permanent Select Committee on Intelligence.
GeoBans did not comply with the standards set forth by the Federal Deposit Association, the watchdog agency, or the Federal Credit Union Administration, which oversees the credit industry.
But the Fed did not charge GeoBank with any wrongdoing.
GeoBank’s stock was down by almost 90% in the first half of 2017, and by the end of the year, it was down more than 100%.
The company did not respond to requests for comment for this article.
In March 2017, President Donald Trump nominated former Treasury Secretary Steven Mnuchin to be the head of the Fed.
Mnuchin has spent his career as a lobbyist and investor in Wall Street and the finance industry.
He has been involved in the Federal Open Market Committee, the Fed’s policymaking arm, since 2014.
His nomination is widely expected to include a commitment to rein in the Fed and reduce its role in the economy.
The banking industry was not happy about the nomination, which has already been criticized by the Banking Industry Association, which represents banking interests, as too cozy with the president’s administration.
“As we look at the new president’s choices for Fed chair, we will continue to closely monitor and monitor their commitment to restoring the Fed to its core mission of protecting our economy and our financial system,” said Tom Schatz, a member of the Banking Association’s Financial Services Task Force.
The Treasury Department declined to comment for the article.