Return to Transcripts main page

CNN Live Saturday

Federal Regulators Assume Control of a Chicago Thrift Bank

Aired July 28, 2001 - 13:01   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: The name on the bank says Superior, but the federal regulators found its lending and bookkeeping practices were inferior. The Superior Bank of Chicago, a federally-insured thrift was taken over by bank regulators. It will reopen on Monday under a new name, and continue business as usual, with federal regulators running the show.

The FDIC, which insures bank deposits, is expected to pay out some $500 million to cover the bank's losses, making it one of the costliest in U.S. history. Dane Placko of our Chicago affiliate WFLD explains how the bank got into this mess.

(BEGIN VIDEOTAPE)

DANE PLACKO, WFLD CORRESPONDENT (voice-over): Regulators from the FDIC leave the Superior bank branch in South Wackard (ph) hours after the federal agency took over the struggling operation. The bank's $2.3 billion in assets and $1.6 billion in deposits have been transferred to a newly created temporary bank, which is being called Superior Federal.

According to Superior's Web site, the bank had 17 branches in the Chicago area, including its national headquarters in Hinsdale. Superior specialized in making loans and mortgages to high-risk customers, charging a higher interest great in exchange for the greater risk. It had been a frequent target of consumer groups, who called Superior a predatory lender.

MADELINE TALBOT, AKRON REPRESENTATIVE: Well, the real message here in Superior's closing and the huge losses to taxpayers is that there are more victims to predatory lending than the minority home owner.

(END VIDEOTAPE)

KELLEY: Federal bank insurance only covers accounts up to $100,000. About $43 million of superior's deposits, held by about 1,000 customers, might not be covered by the insurance.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com