Did Waters play favorites?

Well, one favorite in particular: Boston-based OneUnited Bank. The WSJ reports that a OneUnited attorney approached Reps. Maxine Waters and Barney Frank to complain about how government bailout efforts had hurt the bank.

The bank that Rep. Frank of Massachusetts went to bat for, OneUnited, saw its capital level sink in early September after the U.S. took control of the overextended mortgage giants Fannie Mae and Freddie Mac. OneUnited, a closely held Boston-based lender with offices in Florida and California too, held large amounts of Fannie Mae preferred shares. Their value plunged after the U.S. put Fannie and Freddie into a federal conservatorship, acquired preferred shares in them and took warrants entitling the government to nearly 80% of their common stock.

Frank says that in order to protect OneUnited, he inserted into the $700 billion bailout bill a provision to give special consideration to banks that had less than $1 billion of assets, had been well-capitalized as of June 30, served low- and moderate-income areas, and had taken a capital hit in the federal seizure of Fannie Mae and Freddie Mac. As for Waters, she heads the House Financial Services subcommittee on housing - and until last spring her husband, Sidney Williams, was a OneUnited director. As reported by the Journal, Waters said she was unaware that the bank received money. OneUnited, she said, was "just a small" bank. Not a great answer.