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Illinois Bank Becomes 14th to Fall in 2014

bank-splittingThe fallout of the financial crisis caught up to another bank over the weekend, resulting in a shutdown by federal regulators.

The Office of the Comptroller of the Currency (OCC) announced on Friday the closure of Chicago-based GreenChoice Bank. The recently shuttered bank is the second to fall in Illinois in the past two months and the 14th FDIC-insured institution to close so far this year.

GreenChoice, which had a reputation in the region for its work in making its operations more sustainable and environmentally friendly, was brought down by losses as a result of rising defaults following the financial meltdown, with "no reasonable prospect that the institution will become adequately capitalized" again, OCC said in a statement.

OCC's release also says the bank "had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices."

To protect customers, GreenChoice's deposits—totaling an estimated $71.0 million as of Q1—have been assumed by Providence Bank in South Holland, Illinois, according to FDIC. Providence has also agreed to purchase $67.7 million of GreenChoice's assets, with the remaining assets held by FDIC.

FDIC estimates its Deposit Insurance Fund will take a $14.2 million hit as a result of the latest collapse.

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