The guilty plea to bank fraud and money laundering charges by former MidCoast Community Bank founder and President James Ladio was a tragedy on many levels.
Even before the news of Ladio’s plea came out it seemed unlikely that we would see a new bank for years, if not decades. Capital and regulatory standards are now so onerous that it seems to be producing an environment where a bank may need an asset base in the billions of dollars over the long term.
All that regulation did not stop Ladio over a period of years from carrying out a scheme that according to prosecutors used a number of transactions to shore up increasingly serious personal financial problems. Questions also remain over the role of the unidentified bank, widely believed to be Wilmington Trust, that loaned money to Ladio and in the end led the house of cards to collapse.
Young banks are always face a tough existence. Often, the loans that are available come from riskier customers. Still a number of start-up banks have fared well. Granted, most will eventually be sold, but along the way the upstarts provide winning combination of competition and personal service. Indeed, MidCoast was on its way to merging with well-run Bryn Mawr Trust prior to the investigation of Ladio.
But the biggest tragedy came from a betrayal of the trust that is essential to banking and for that matter all relationship
