Federal and state authorities appear to have received complaints suggesting that Arlington Heights-based Meadows Credit Union may be overstating the value of collateral in its financial reports. If true, and depending upon the scope of any such misrepresentation - could Meadows be the next target of a financial institution takeover in the Chicago area?
On August 7, 2010 the Federal Deposit Insurance Corp. shut down Chicago's Ravenswood Bank. Ravenswood becomes the 23rd Chicago area bank to be closed since the start of 2009, when the real estate and credit crisis began taking a toll on lenders. FDIC-insured accounts at Ravenswood are safe. The agency said Ravenswood's two branches will reopen as Northbrook Bank locations today and that checks and ATM transactions will be processed as usual. The takeover involves a loss-sharing agreement with Northbrook Bank. The FDIC estimated the deal will cost its insurance fund $68.1 million. It said Northbrook Bank will pay about $10.7 million for control of $119 million in non-brokered deposits. Ravenswood's total deposits as of June 30 were $269.5 million. Ravenswood's locations are at 2300 W. Lawrence and 320 E. Northwest Hwy., Mount Prospect. It is the first Chicago area bank to be shuttered by the FDIC since Midwest Bank in May.
Credit unions are federally regulated by the National Credit Union Administration (NCUA). The State of Illinois oversees credit unions through the Illinois Department of Financial and Professional Regulation. Both of these agencies have received complaints suggesting the existence of inaccuracies in the reports required of Meadows, regarding loan collateral. Overstated collateral is among the principal reasons the feds step in to seize financial institutions. To what extent Meadows is afflicted by this malady is unknown by this blog.
If you have any information about Meadows and this issue or any related problem at the credit union, please use this space to post.
