Bank Failure Friday Strikes Again
After regulators skipped a week, bank failure Friday is back. Friday afternoon the FDIC announced the closure of Bank of Lincolnwood in Lincolnwood, Illinois. It was the 37th failure of the year and the sixth in Illinois.
The Illinois bank is relatively small with total assets of approximately $214 million. Lincolnwood's collapse is only expected to cost the FDIC's insurance fund $83 million. The FDIC estimated the balance of its insurance fund at just over $13 billion as of March 31 but planned assessments should help to replenish it.
Regulators reached an agreement with Republic Bank of Chicago to assume the deposits of Bank of Lincolnwood. Republic agreed to purchase half of the failed bank's assets. The FDIC will dispose of the rest.
On April 13, the FDIC had entered into a cease and desist order with Lincolnwood. The FDIC demanded the bank stop a laundry list of "unsafe and unsound banking practices" included having a board that did not adequately supervise management, keeping insufficient capital, and engaging in "hazardous lending and lax collection practices." The FDIC and the bank apparently disagreed about how well the bank held up its end of the deal. Lincolnwood officials tried unsuccessfully to get a restraining order in Cook County Circuit Court to stop the bank's closure, according to the Chicago Tribune.
The Trib also reported that Lincolnwood's board included a former chairman "who previously was stripped of authority to lend, transfer funds and make investment decisions" by regulators.
As big banks return their TARP money, Fannie Mae and Freddie Mac continue to be a drain.
Latest Stories in this Project
- Search the Fed's Documents Detailing Their Lending to Banks During the Crisis
- Behind Administration Spin: Bailout Still $123 Billion in the Red
- The Bailout Yearbook: The Stars and the Slackers
- Identifying Suspicious Short Selling, But Not Who's Behind the Trades
- Treasury's 'Point Man' on AIG Bailout That Benefited Goldman, Owned Goldman Stock
Get Updates
Our Hottest Stories
- Freddie Mac Bets Against American Homeowners
- Why Fannie and Freddie Are Hesitating to Help Homeowners
- Bets Against Homeowners Must Stop, Freddie Mac Was Told
- By the Numbers: Life and Death at Foxconn
- How the Stimulus Revived the Electric Car
- Drive-by Scanning: Officials Expand Use and Dose of Radiation for Security Screening
- $10 Million Fine on Red Cross Highlights Its Troubled History of Blood Services
- Bill Would Require Independent Study of X-Ray Body Scanners
- Allergan Erases Doctor Payment Records
- With Spotlight on Super PAC Dollars, Nonprofits Escape Scrutiny
- Freddie Mac Bets Against American Homeowners
- Drive-by Scanning: Officials Expand Use and Dose of Radiation for Security Screening
- Bill Would Require Independent Study of X-Ray Body Scanners
- How the Stimulus Revived the Electric Car
- Meet the Obscure Federal Regulator Who's Not Helping Homeowners
- By the Numbers: Life and Death at Foxconn
- Why Fannie and Freddie Are Hesitating to Help Homeowners
- $10 Million Fine on Red Cross Highlights Its Troubled History of Blood Services
- One Soldier's Progress Against Traumatic Brain Injury
- Bets Against Homeowners Must Stop, Freddie Mac Was Told
