President Obama Favorite Bank ShoreBank Closed by FDIC

ShoreBank the Chicago community bank that was to serve inner city consumers and a favorite of President Obama was shuttered by FDIC and Illinois regulators on Friday.

The fed seized the bank after regulators warn the about capital levels. ShoreBank’s tier 1 capital levels at $4.1 million in June vs. $26.3 million. In 2009 ShoreBank had $43.9 million.

ShoreBank lost $39.6 in the first half of the year.

Union Partnership Bank created to take over troubled community banks like ShoreBank. Union Partnership Bank branches in Chicago, Detroit and Cleveland areas will reopen in Saturday.

“The good news is that the bank, under this new management, will still be there and serving the South Side community,” said Dory Rand, president of the Chicago-based Woodstock Institute, a non-profit that studies community lending. “They have made the South Side a decent place to live and work and do business.”

Bloomberg News

Michelle Malkin has more on the new Union Partnership Bank including the former President of First Chicago Bill Farrow will be in charge.

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