From Bloomberg

ShoreBank Corp., the unprofitable Chicago lender to low-income communities, may be forced out of business after failing to win $75 million of federal bailout funds, three people with direct knowledge of the matter said.

ShoreBank raised more than $145 million in May from General Electric Co. and banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc. That money was contingent on more federal funding that is now unlikely to be released, the people said, speaking anonymously because the matter is private.

“It looks like they are just out of options,” said Gerard Cassidy, a bank analyst at RBC Capital Markets in Portland, Maine. “Without a lot of private equity, their hands may be tied and the only option might be putting it in receivership.”

From Fox Business Network

As if ShoreBank doesn’t have enough problems, the financially troubled but politically connected Chicago-based community lender is now facing a federal investigation into whether political pressure was applied to force several major Wall Street firms to bail out the bank before it was liquidated by banking regulators, FOX Business has learned.

Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program, or TARP, which has agreed to earmark $75 million to help ShoreBank survive, has now bowed to pressure from Congressional Republicans and has agreed to investigate charges that key officials in the Obama White House, as well as FDIC chief Sheila Bair, pressured Wall Street firms to donate money to keep ShoreBank alive.