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2 Midwest Financial Institutions Fail

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A pair of financial institutions operating in the Midwest were seized last week by state regulators and shut down.

The Illinois Department of Financial & Professional Regulation-Division of Banking on Friday seized and closed AztecAmerica Bank.

The financial institution, which was based in Berwyn, Ill, had only been in existence since September 2005.

The staff at AztecAmerica stood at just 17 employees at the end of last year.

Among its $66 million in total assets were $14 million in residential loans, $30 million in commercial real estate loans and $1 million in construction-and-land-development loans.

AztecAmerica was hit with a $4,500 Federal Deposit Insurance Corp. civil money penalty in January 2011, an FDIC cease-and-desist order in July 2010 and another FDIC cease-and-desist order in June 2010.

The FDIC, which was appointed as receiver by the state, held a secret bidding process.

The winning bid was awarded to Republic Bank of Chicago, which assumed all of AztecAmerica’s $65 million in deposits for a 1.025 percent premium and acquired $58 million of its assets.

The FDIC estimates that its Deposit Insurance Fund will be depleted by $18 million to cover the cost of the bank failure — the seventh FDIC-insured bank to be shut down this year.

Also on Friday, the Michigan Department of Insurance and Financial Services said it forced Health One Credit Union into conservatorship.

The regulator noted that the credit union was “in an unsafe and unsound condition.”

The Detroit-based institution had 3,800 members and $18 million in assets. It was chartered in 1957 and had a branch in Cleveland.

The National Credit Union Administration was appointed conservator of Health One.

“While continuing normal member services, the two agencies will work to resolve issues affecting the credit union’s safety and soundness,” the NCUA said.

Health one was the fourth credit union failure that Mortgage Daily has reported on this year.

In all, Mortgage Daily has tracked the failure or closing of 19 mortgage-related entities so far during 2014.

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