Sunday, August 22, 2010

FDIC Takes Over Local Bank

I received a phone call early Friday morning from a source about the FDIC who was going to seize control of Butte Community Bank later that evening. The feds certainly do things in style. They were suppose to approach the bank's main offices and shut its operations down. There had been talk in the banking community that this was going to happen after Butte Community Bank's large loans had taken a drop in value. Butte Community Bank was purchased by Rabobank. It was a very quick and very hush operation. I was lucky enough to be on site at the right time and examiners approached the bank buildings.

Members of the FDIC security approach the Community Valley Bankcorp building off East Lassen Avenue Friday, which is the headquarters for Butte Community Bank. The bank was taken over by the FDIC.
(Jason Halley/Chico Enterprise-Record)

The next day I went to one of the branches to see the changes that have been made. I guess the FDIC do things quick. The plan to take the bank over Friday at closing time and if there is a new buyer, reopen by Monday. Many customers had read our story in the morning paper and were coming to inquire their options. One man I talked to closed his accounts because he didn't want to leave his money with a bank he didn't know.

Michael Bridges walks out of Butte Community Bank after closing his account he had for three years. The new Rabobank, was the former Butte Community Bank off Forest Ave Saturday, August 21, 2010 in Chico, Calif., after FDIC Bank Federal regulators took over Chico-based Butte Community Bank on Friday, because of a strategy to recapitalize the local bank that apparently failed.
(Jason Halley/Chico Enterprise-Record)







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