The Tribune is reporting that the FDIC has stepped in to close the ailing Broadway Bank:
Broadway Bank, the family-run lender that helped launch U.S. Senate candidate Alexi Giannoulias’ political career, was one of seven Chicago-area institutions seized by the U.S. government Friday and sold to healthier companies.
The failure of Broadway, which was unable to raise the $85 million it needed to remain independent, will cost the Federal Deposit Insurance Corp. $394.3 million.
Giannoulias worked for his father at Chicago-based Broadway before entering politics, and the bank’s struggles in recent years with real estate loans gone bad have weighed on Giannoulias’ Democratic bid for Barack Obama’s old Senate seat.
During Giannoulias’ successful run for state treasurer in 2006, he used his banking experience as one of his chief qualifications. But in the Senate race, he has tried to distance himself from the bank’s troubles.
Obvioiusly, there’s experience and then there’s experience. I doubt this will help the Democrats’ bid to retain the junior senator from Illinois’s seat.
Update
Broadway Bank, Chicago, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation — Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with MB Financial Bank, National Association, Chicago, Illinois, to assume all of the deposits of Broadway Bank.
The four branches of Broadway Bank will reopen on Saturday as branches of MB Financial Bank, National Association. Depositors of Broadway Bank will automatically become depositors of MB Financial Bank, National Association. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from MB Financial Bank, National Association that it has completed systems changes to allow other MB Financial Bank, National Association branches to process their accounts as well.
