This week saw the failure of a bank that was more than a century old. Poor management of the financial institution was blamed for its demise.
GreenChoice Bank, fsb, was established in 1910. It made it through the Great Depression and obtained deposit insurance coverage in 1935.
The Chicago firm said its founders were an experienced team of local bankers that saw a void in the banking industry.
“Banks had gotten away from their true responsibility to the community, which we believe should be investing in the local economy and treating customers as people and not just account numbers,” a description of the bank on its website said. “There was a growing need for a better relationship between banks, the public they serve, and their collective impact on the planet.”
Environmental principles were also touted.
“We’ve committed to reducing waste in back-office operations by implementing paperless processes, electronic document distribution, image-based check processing, online banking and e-statements,” the company description said. “We’re re-examining the banking industry’s long-standing wasteful business practices, applying product innovations and enacting more mindful sourcing, such as GreenChoice debit cards with of 100 percent recycled plastic core.”
But despite its efforts to be socially responsible, GreenChoice has failed.
On Friday, the Office of the Comptroller of the Currency seized the bank, closed it down and appointed the Federal Deposit Insurance Corp. as receiver.
The OCC, which issued a consent order against GreenChoice in June 2012, said in a media statement that the action was taken because the bank had squandered its assets and earnings through unsafe and unsound practices.
“The OCC also found that the institution incurred losses that depleted its capital, the institution is critically undercapitalized, and there is no reasonable prospect that the institution will become adequately capitalized,” the regulator said.”
Providence Bank LLC assumed all of the 22-employee bank’s $71 million in deposits as of March 31. It also acquired $68 million of its $73 million in assets, which included $19 million in residential loans, $29 million in commercial real estate assets and $1 million in construction-and-land-development loans.
The FDIC expects its Deposit Insurance Fund to take a $14 million hit as a result of the failure — the 14th so far this year.
Mortgage Daily has tracked 31 mortgage-related failures and business closings thus far in 2014.