About 10 Kan. Banks Hurt by Federal Bailout

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TOPEKA, Kan. (AP) _ The state's top banking regulator says about 10 state-chartered banks will be hurt by the federal bailout of mortgage giants Fannie Mae and Freddie Mac.

But Bank Commissioner Tom Thull says none are in danger of failing.

Thull told The Topeka Capital-Journal that the banks hold common or preferred stock in the two corporations. That stock has become nearly worthless because of the federal government's takeover.

Thull declined to identify the banks, which represent 4 percent of the 250 state-chartered banks.

Together the two companies hold or guarantee about $5 trillion in mortgage debt, about half of the nation's total. Congress created them to pump money into the mortgage market so interest rates would stay low.
Information from: The Topeka Capital-Journal,

(Copyright 2008 by The Associated Press. All Rights Reserved.)