Was Bear Stearns rescue legal?
Housing Group Challenges Fed’s Bear Stearns Deal
WASHINGTON (Reuters) – A housing and fair lending activist group has challenged the legality of the Federal Reserve’s quick approval of financing for Bear Stearns via JPMorgan Chase , questioning the Fed’s authority to approve the deal because it involves a non-bank institution.
Inner City Press Community on the Move, in a complaint filed with the Fed late Saturday, called the central bank’s brokering of the deal “entirely illegal” and anticompetitive, and questioned whether sufficient Fed members had voted for it.
In a first step toward challenging the bailout, Inner City Press questioned the legality of the Fed approving the deal without public notice, on the grounds Bear Stearns “is not a banking holding company and does not own a bank.”</em>
