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American Morning

Failed Chicago Bank Says $43 Million May Not Be Insured

Aired July 30, 2001 - 09:50   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: Some bank customers in suburban Chicago this morning are saying show us the money. Their bank failed and regulators say up to 43 million bucks may not be insured.

CNN's Chicago bureau chief Jeff Flock is outside Superior Bank in the suburb of Park Ridge -- Jeff, what's going on there?

JEFF FLOCK, CNN CORRESPONDENT: Good morning to you, Donna.

This is one of 18 branches of Superior Bank here, this one not too far from O'Hare Airport. Perhaps you hear the planes going overhead. You can see already a line beginning to form out here. The bank begins operation in about 10 minutes. It closed on Friday and is opening now in about 10 minutes.

As you say, about $43 million believed to be at stake. I would estimate about two dozen or so people are either in their cars or in line this morning to check on their funds. The money that is at stake would either be trust accounts or money market funds, those not insured by the FDIC or perhaps anyone who had in excess of the $100,000 limit to which the FDIC basically insures your deposits.

Now, the source of this problem appears to be what has been called sub prime lending, that is, financial institutions that get into the business of lending to people that don't have very good credit. This is a practice that with deregulation more banks have gotten into. You can also, you can still now find on the Internet, despite the close of this bank on Friday, advertisements for people with bad credit, come to Superior Bank. Well, the people coming to Superior Bank this morning are the people that have funds here trying to determine whether or not they will still be here after today.

We'll continue to watch it throughout this morning. Jeff Flock, CNN, reporting live from Park Ridge, Illinois.

KELLEY: Thank you, Jeff.

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