OAKLAND — Former Gov. Angus King expressed support Monday for The Bank of Maine, which was criticized for unsafe and unsound banking practices by federal regulators earlier this month.
King spoke to the issue while touring towns in Kennebec County and meeting area residents and business owners.
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King, who left the bank’s board of directors in April after an 18-month stint, said he resigned as part of a larger effort to clear his plate for his ongoing campaign as an independent candidate for the U.S. Senate.
In addition, King said, he left because of the potential of a conflict of interest arising.
“The board there still approves major loans,” he said. “It was really driven by a concern that I would approve a loan by somebody who would then make a donation to the campaign.”
King, whose top opponents in the Senate race are Republican Charlie Summers and Democrat Cynthia Dill, was criticized by the Maine Republican Party in a press release Monday for his role as a bank board member, which the party claimed was an example of his “record of financial mismanagement.”
According to financial disclosure forms, King made $67,000 while serving on The Bank of Maine board for 18 months.
On Aug. 17, an enforcement action against The Bank of Maine was released by federal bank regulators, who cited “unsafe and unsound banking practices and regulatory violations relating to asset quality, credit administration, management and the bank’s compliance program.”
An agreement between The Bank of Maine board and regulators was signed by board members May 30 and regulators on June 21. The board agreed to issue quarterly progress reports and address violations of law, including “specific procedures to prevent future violations.”
The bank was designated as being in “troubled condition” under the agreement.
On Monday, King echoed a statement from bank CEO and board Chairman John Everets, who said that the violations were all from at least a year ago and have since been corrected.
“My understanding is that that is a reflection of the past and not the current status, and they’re feeling very positive about the future,” King said.
King said he was aware of frequent contact between federal regulators and the bank, but that he did not know that the enforcement action was coming when he resigned from the board in April.
King said that new leadership has been working hard to turn the bank around since taking over in May 2010, soon after a federal cease-and-desist order first threatened the bank’s ability to do business.
King joined the board soon thereafter, in October 2010.
“It was essentially a turnaround situation. The bank was in terrible shape when it was taken over and now it’s doing well. It’s saved over 300 jobs,” King said.
While visiting businesses Monday afternoon on Oakland’s Main Street, King expressed a more tangible sign of his confidence in the institution.
He visited the bank’s Oakland branch and told the tellers there that his campaign does all its banking through The Bank of Maine.
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