CHICAGO (CBS) – A savings and loan with strong ties to Chicago’s Hispanic community has become the 38th bank nationwide this year to fail.
Second Federal Savings & Loan Assn. of Chicago has been the subject of federal scrutiny for several years.
Press accounts from 2009 indicated that regulators ordered it to raise additional capital amid reports of worsening losses and loan delinquency rates. But since then, its troubled-asset ratio has skyrocketed.
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The Federal Deposit Insurance Corp. (FDIC), in announcing the action, said Second Federal had $199.1 million in assets and $175.9 million in deposits as of Friday; its failure is expected to cost the FDIC’s deposit insurance fund $76.9 million.
Hinsdale Bank also is buying about $14.2 million of the bank’s assets, comprised mainly of cash. All of Second Federal’s loans, including consumer loans and mortgages, will be retained by the FDIC for later sale. For now, the FDIC said, loan payments should be made to Second Federal.
Second Federal had a national reputation for making home loans to undocumented immigrants, and touted the program on its web site to the end. Hinsdale Bank & Trust Co. will take control of its branches and accounts.
The thrift had three offices, at 3960 W. 26th St., at 4281 S. Archer Av., and at 4811 Cermak Rd., in Cicero. The FDIC indicated in its release that all will reopen Saturday as Hinsdale Bank & Trust offices.