The Republican Senator from North Carolina has made the news this week for some eye-raising comments given during a speech in Hendersonville. Burr, who represents the state that is the second financial capital of the United States, told his wife on a Friday night to withdraw money from North Carolina ATMs up to the limits each machine would provide and the theoretical daily withdraw limit from his bank. She was instructed, in his own words, to do this all weekend according to the Hendersonville Times-News:
“The state of the financial system at that time had a profound impact on the senator.
‘On Friday night, I called my wife and I said, ‘Brooke, I am not coming home this weekend. I will call you on Monday. Tonight, I want you to go to the ATM machine, and I want you to draw out everything it will let you take. And I want you to tomorrow, and I want you to go Sunday.’ I was convinced on Friday night that if you put a plastic card in an ATM machine the last thing you were going to get was cash.’ “
Ironically, Washington Mutual & North Carolina based Wachovia were victimized by silent runs boosted by media hype/speculation, were declared insolvent, and would be shuttered if they did not agree to shotgun weddings with forced suitors during this time.
From all the banking laws I know, Senator Burr did nothing illegal. He is perfectly within his rights to withdraw money from his bank accounts for whatever reason he chooses. However, his actions obviously did little to inspire any confidence in the banking situation and likely helped to enhance the run on banks. I highly doubt the Burrs live in a bubble, and it’s certainly possible that friends & associates of the Burr family were also tipped off to pull their own money. Pretty disingenuous actions to take for a Senator who represents a state that houses two of the top five US banks (at the time) and several other large regional banks. It may be legal, but it certainly stinks of being unethical since he was basing his transactions on whispers in the Capitol hallways. Some may think I’m grasping at straws, but look at it this way: if he didn’t withdraw money but sold banking stock based on the same whispers his office would have been raided by the SEC that same day.
If I was still a North Carolina resident, I would be highly upset at my Senator’s actions. His dubiously timed run on his bank has definitely helped reduce North Carolina’s standing as a financial center. Only Bank of America remains as a national North Carolina bank and the banking crisis he participated in has left BofA in shatters, not to mention the thousands of expected job losses at Wachovia Wells Fargo and the downstream impact of businesses stung by the loss of the Charlotte banking headquarters.
Thanks for nothing, Mr. Burr.