MetroPacific Bank, Bank Haven, Clarkston State Bank, Hastings State Bank

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The Federal Deposit Insurance Corporation revealed on Friday that it had issued warnings to four small US banks that lacked sufficient reserves to cover potential loan losses.

The cease-and-desist orders issued in June said the four banks needed to raise more capital, expand their loss allowances and better oversee and diversify their loan portfolios.

...

The banks receiving cease-and-desist orders in June were MetroPacific Bank in Irvine, California; Bank Haven in Haven, Kansas; Clarkston State Bank in Clarkston, Michigan; and Hastings State Bank in Hastings, Nebraska.

http://www.ft.com/cms/s/0/f52c86b4-6018-11...0077b07658.html

[MrsCat 6]

For the life of me, I cannot imagine how these banks got themselves into this situation. Clearly someone who actually works for the bank must have seen the potential disaster long before the FDIC had to step in. At the same time, the FDIC should have stepped in so much sooner, once they say the trend in the market to give credit to anyone. These lending practices were horrendous.

[Ken y Leidys 20]

For the life of me, I cannot imagine how these banks got themselves into this situation. Clearly someone who actually works for the bank must have seen the potential disaster long before the FDIC had to step in. At the same time, the FDIC should have stepped in so much sooner, once they say the trend in the market to give credit to anyone. These lending practices were horrendous.

They were making big money with high-risk loans. I met a guy who wanted me to move my prime 6.37 pct. 30 yr. mortgage to a sub-prime Interest-only loan. His thinking, "If you marry again, and get divorced again, she will just get the house, so who cares?" No, I didn't remarry, and I kept my 30 yr. prime loan. But, people are out there who want to make a fast buck, and banks are not exempt from this line of thinking.