UNITE HERE: Failed Inland Bank merger raises questions for customers

CHICAGO--()--UNITE HERE issued the following letter to Inland Bank’s customers:

Dear Inland Bank customer:

Inland Bank’s regulatory woes continued as the FDIC objected to the bank’s purchase of College Savings Bank (“CSB”). (Read the October 3, 2015 article in Crain’s Chicago Business here.)

The failed merger last month is the latest blow in a series of regulatory problems. From November 2012 through July 2013, Inland Bank was under a Consent Order that restricted growth and lending to some borrowers. In September 2014, the Illinois Securities Department began investigating Inland Bank’s transactions with affiliated entities in an inquiry that was still ongoing as of September 2015.

UNITE HERE wrote to federal and state regulators with questions regarding the CSB transaction in late 2014. Among other questions, we asked whether Inland Bank had informed the FDIC of the Illinois Securities Department inquiry into the bank’s transactions with related parties or explained the purpose of those transactions. (Read our letter here.)

Inland Bank experienced “explosive” growth in its commercial lending since 2012; however, “the acceleration may have given regulators pause,” according to Crain’s. The bank’s chairman told Crain’s that the bank has since de-emphasized lending to businesses and resumed focusing on growth in commercial real estate lending.

Inland Bank also increased self-dealing transactions after the termination of the Consent Order. The bank more than tripled extensions of credit to related parties from June 30, 2013 to June 30, 2015 (from $8.9 million to $32.1 million).

Customers should ask Inland Bank the following questions:

  • Why did the FDIC rescind approval for the bank merger?
  • Does Inland Bank’s shift from business lending to commercial real estate lending put the bank at risk, and will it impact customers’ ability to obtain credit from the bank?
  • Why have related party transactions increased? Are related parties tied to the bank and its leadership receiving better loan terms than other borrowers?
  • What is the status of the Illinois Securities Department’s investigation of Inland Bank?

Visit www.inlandbankalert.org for further information regarding Inland Bank.

Contacts

UNITE HERE
Jordan Fein, 312-576-5048
jfein@unitehere.org

Release Summary

In a letter issued to Inland Bank’s customers, UNITE HERE asks if clients should be concerned about fallout from the bank’s recent failed merger, the latest blow in a series of regulatory problems.

Contacts

UNITE HERE
Jordan Fein, 312-576-5048
jfein@unitehere.org