Private equity group Apollo Management will establish a new bank under an obscure provision buried in the US financial regulations signed into law last week.
Apollo is to take advantage of a change that allows banks to operate in multiple US states without a national charter, lawyers say.
Apollo will work with ex-Countrywide executives in setting up Ares Bank. Senator Chris Dodd took Countrywide payola in the past as a "Friend of Mozilla." Dodd's bill gave private equity underwriters (PEU's) a virtual free pass under financial reform.
Apollo's readiness to pull the loophole trigger implies what? Did they lobby for the obscure "new bank" provision?
Apollo plans to get round ownership restrictions which can force a private equity group to be considered a bank holding company by asking its investors to put money alongside it in the new bank, to be called Ares.
The Gods favor PEU's. Might private equity be Congress' Aphrodite.