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Friday, March 09, 2012

FDIC takes over another bank and has a connection with an indicted former Chicago Alderman...

A now defunct bank!
If you follow the business pages of Chicago newspapers, we've been knowing about this for a while. The indicted former Alderman in question is Bill Beavers. He had been indicted last month for tax evasion - mainly he had been using campaign funds as income but failed to report it for taxing purposes. Anyway this bank failure doesn't appear to be related to his indictment however this connection is noted because Beavers had not only been an investor, but a vice chairman as well:
New City Bank, the South Michigan Avenue lender for which indicted Cook County Commissioner William Beavers is vice chairman, was closed today by state banking regulators.

The Federal Deposit Insurance Corp. couldn't find another bank to take on the assets and deposits, and instead will pay back depositors up to the $250,000 limit at which the FDIC insures deposits.

New City had $72.4 million in deposits and $71.2 million in assets as of year-end 2011.

The bank was launched in 2003 by a group of local investors, including Mr. Beavers, a South Side alderman at the time. Mr. Beavers, who was indicted last month on charges of tax evasion, holds a small stake in the bank, which now will be wiped out. He denies any wrongdoing.
It did at least have on notable account:
The FDIC now will take ownership of the bank's assets, including loans to U.S. Rep. Bobby Rush, D-Chicago, who ran into brief trouble with New City a few years ago over non-payment of property taxes on a home on which the bank held a mortgage.
More from the Sun-Times:
The shutdown will cost the FDIC’s insurance fund about $17.4 million, the agency said. As of Dec. 31, New City reported $71.2 million in assets and $72.4 million in deposits. It is the 13th FDIC-insured bank to fail this year nationwide.

The bank’s most recent listing of its officers on its web site omitted any mention of Beavers, who is accused of failing to pay taxes on more than $226,000 in campaign funds he allegedly converted to personal use.
This bank failure even hit the AP wires, the first two sentences of that article:
Regulators have closed a small bank in Chicago, the 13th U.S. bank to fail this year.

By this time last year, 23 had been shuttered.
The Sun-Times noted the last Chicago area bank to fail which was early last month. So far in Illinois according to Marketwatch, New City Bank was the second to fail this year!

Here's the bank's website, there's nothing there other than the fact that the regulators had closed the bank and the FDIC had been named its reciever! Another unusual aspect is that another bank could be found to take it over so it was noted at the Sun-Times that:
The FDIC said it will hold all assets of New City for later distribution and that customers should make loan payments as usual.  

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