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FDIC Closes Midwest Office Over Fewer Bank Failures

Chatter about a sudden sweep of bank failures may be all the rage in Europe, but fewer closures for financial institutions stateside led the ""FDIC"":http://www.fdic.gov/ to shutter a temporary office in the Midwest on Friday. The glacial crawl for U.S. bank failures makes good on FDIC predictions that fewer institutions would fail over 2011 as more ledgers stay in the black ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a change of pace for an era in which the federal agency closed a record number of banks.

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The FDIC made public Friday that it would permanently shutter the Midwest Temporary Satellite Office in Schaumburg, Illinois, near the end of September. Established by the FDIC at the heady start of 2010, personnel in the office oversaw loss-share transactions in which the agency served as receiver and helped sell off assets to acquiring institutions.

In a ""statement"":http://www.fdic.gov/news/news/press/2011/pr11152.html, the federal agency said it closed the office in acknowledgement of ""signs of the improving health of the banking industry in the Midwest,"" which no longer demands the attention and workload of a dedicated staff responsible for the entire region. The closure beats expectations that originally saw the temporary office shutting down over 2013.

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""With the banking industry healing and projected failures declining, it is important that we efficiently draw down to respond to our declining workload,"" Bret Edwards, director of the FDIC's division of resolutions and receiverships, said in the statement.

He spared few words in praising the staff that formerly belonged to the temporary office, saying that the regulators ""represented the FDIC in an exemplary fashion during a period of significant stress in the financial system"" with ""professionalism and dedication├â┬ó├óÔÇÜ┬¼├é┬ª vital in mobilizing resources quickly to respond to the crisis and fulfill the FDIC's mission of maintaining stability and public confidence in the nation's banking system.""

Currently staffed by 287 non-permanent employees, fewer than the authorized 500, the Midwest Temporary Satellite Office continues to oversee 35 bank failures and liquidations ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the most it has managed since opening in March 2010. The FDIC said that it would assist employees with their outplacement needs as the office goes dark in September.

All remaining work from around the Midwest office will transfer to a Dallas hub in the coming months. News about the shutdown follows the closure of another temporary office for the West Coast ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a sign that bank failures are crawling to a snaillike pace in the U.S. as the financial services industry improves.

In August the FDIC ""released"":https://themreport.com/articles/fdic-backed-financial-institutions-show-signs-of-health-2011-08-24 figures signaling that the number of ""problem"" banks had fallen for the first time nationally since 2006, reflecting a decline in banks with ill health from 888 to 865.

The encouraging signs of health nonetheless arrive amid a bevy of worries about collapsing institutions in Europe, where troubled assets could infect U.S. bank portfolios, according to analysts in a ""past story"":https://themreport.com/articles/how-european-debt-debacle-could-stifle-housing-2011-08-12 for _MReport_.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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