New Century Bank - Shelby Township, MI Bank Gagal - Episode 327

**Freesia Brindisi** (0:01)
Good afternoon, good afternoon. Thank you so much for joining me. This is the podcast, The Endurance of Labor Laws. I am your lovely host, Freesia Brindisi. Today is episode 327, and we're going to take a look at another failed bank. This one is called New Century Bank. But before we dive in, let me give a big shout out to my listeners because as usual, you guys are awesome. I love to see you here. So a big shout out to Virginia, California, Oklahoma, New York, Texas, Pennsylvania, Illinois, British Columbia, Florida, Oregon, New Jersey, Georgia, Quebec, West Virginia, Indiana, Colorado, Arizona, Maryland, Ohio, Massachusetts, Michigan, Minnesota, Washington, Alabama, District of Columbia, also known as DC, aka the swamp, let's drain it. Big shout out to Nebraska, New Hampshire, Iowa, Utah, Ontario, North Carolina, Tennessee, Mississippi, Idaho, Kansas, Wisconsin, Louisiana, Rhode Island, Hawaii, Nevada, Alberta, New Brunswick, Connecticut, Manitoba, Wyoming, Newfoundland and Labrador, which is in Canada, Missouri and Nova Scotia and they are in Canada as well. In case you don't know, Nova Scotia is where Anne of Green Gables was filmed, the original series made by Walt Disney. Hopefully, they haven't gone woke with Anne of Green Gables because it's a really good series and it's a really good book. In terms of countries, a big shout out to the United States, Singapore, Sweden, China, Canada, Brazil, the Russian Federation, the United Kingdom, Bangladesh, Australia, India, Germany, the Netherlands, South Africa, Spain, Niger, Slovakia, Japan, Israel, Denmark, the Federated States of Micronesia, Uzbekistan, Hong Kong, the Philippines, Greece, France, and Turkey. Okay. So again, today we're going to be taking a look at New Century Bank. This is a bank that failed back in the year 2002 This one was located in Shelby Township in Michigan, and there was no bank that acquired it. So this one must have been really bad because another financial institution did not take it over, did not acquire it, took on none of their debt. So this one remained with the FDIC, and the FDIC had to completely dissolve it is basically what happens here. And so this one failed March 28th in the year 2002 And I'm going to look at its data and read it to you in regards to what the FDIC released about this bank. And again, this is online. I'm not making this up. These are legal documents via our federal government and also the banking sector of our economy in the United States. So on March 28th, 2002, New Century Bank of Shelby Township in Michigan was closed by the Michigan Commissioner of the Office of Financial and Insurance Services. And the Federal Deposit Insurance Corporation, also known as FDIC, was named receiver. As receiver, the FDIC is charged with winding up the business affairs of the failed financial institution. Nothing new with that. This includes the disposition of assets and liabilities of the failed financial institution and payment of dividends to approved creditors in order of priority. So again, if you're not an approved creditor, you're screwed. If you're not considered a priority, you're out of luck. The FDIC as receiver has taken all necessary actions to conclude the affairs of the failed financial institution and has made all dividend distributions as required by law. And again, if it's not required by law, you're out of luck. And the receivership estate is deemed terminated. In terms of the press release, it says the FDIC issued a press release about the institution's closure. If you represent a media outlet and would like information about the closure, please contact the FDIC Public Affairs Office at 202-898-6993.
And I do have the actual press release that was released back in 2002 So this was from the FDIC itself, and it was for immediate release on March 28, 2002 The media contact was Phil Beatty or Batty, B-A-T-T-E-Y, telephone number 202-898-6993.
It says the FDIC approves the payout of insured deposits of New Century Bank of Shelby Township in Michigan. The Board of Directors of the Federal Deposit Insurance Corporation, also known as the FDIC, approved the payout of the insured deposits of New Century Bank of Shelby Township in Michigan. The bank was closed today and that was back on March 28, 2002 by the Michigan Commissioner of the Office of Financial and Insurance Services and the FDIC was named receiver. New Century Bank had total assets of $19 million and total deposits of $18 million with $489,000 and 17 accounts exceeding the federal deposit insurance limit. The FDIC received no bids for the bank's deposits. As a result, Saturday morning, the FDIC expects to mail checks to the customers of the failed bank for the amount of their insured deposits. So if it's not insured, they're not getting their money. Customers with more than $100,000 on deposit at the failed bank will be contacted by FDIC claim agents beginning April 1st, meaning they're screwed. New Century is the sixth FDIC insured institution to fail this year, and that was back in 2002, and the first in Michigan since Omnibank of River Rouge was closed on April 9th, 1998 So very interesting there. So what kind of raised my eyebrows with this is that this bank did not fail by a lot, but it failed. If you think about it, total assets of 19 million is a nothing. That's basically a sneeze. Total deposits of 18 million, that's a nothing compared to other banks. And it said they had $489,000 in 17 accounts exceeding the federal deposit insurance limits. So that's not a big spread compared to other banks that we've looked at. But for some reason, this bank could not even handle those small amounts which is very odd. So this is not a huge bank failure. It's a mini one. But it does raise my eyebrows because here's the thing. This bank should have been able to have handled $19 million in assets. And they should have been able to handle $18 million in deposits. And only $489,000 in 17 accounts exceeded the federal deposit insurance limit. That's not very much. So something was going on with their books, which comes down to poor management. So again, more than likely the people that ran this bank and they ran it into the ground, they probably just jumped or bailed ship, so to speak, like rats leaving a sinking ship and they probably just went to another financial institution because that's typically what they do. Unfortunately, and no one calls them out on it. They never go to jail or prison unless they commit fraud or embezzlement and it can be proven at a federal and a state level. I say federal and state because there are sometimes sayings are a federal offense, sometimes sayings are a criminal offense at a state level. And sometimes states like Michigan, they're kind of shady and I don't mean that to be offensive towards Michigan. I love my listeners there, but you know what kind of state you have and you know that it's, you know, there are pockets of a lot of Democrats there and they don't believe in holding everybody accountable because they want to make sure that they get their money for their elections. So it's kind of shady. And Michigan has been known to have ties at different labor unions and that's not healthy. That's not healthy for our economy. That's not healthy for our workers because it is a conflict of interest. But anyway, moving on in regards to the insured deposits, it says all accounts at New Century Bank were closed as of March 28th, 2002 Because the FDIC was unable to arrange a transfer of the deposits of New Century Bank to another financial institution, checks for the insured portion of deposit accounts were mailed to depositor addresses shown on the books and records of the failed institution. In terms of the priority of claims, it's the usual. It says the dividend process is complete. In accordance with federal law, allowed claims are paid. So again, basically, if it's not an allowed claim, you're not getting paid. All, or sorry, allowed claims are paid after administrative expenses in the following order of priority. Again, when you see the word administrative, you need to think it's sucking it dry of the money, because these are basically professional paper pushers that they want their pound of flesh and they're gonna get it. Whether they are the FDIC or administrators within the bank that have probably been protecting their own pay for a long time and they don't really care what happens to the bank that they were managing, which is why they ran it into the ground. So in terms of the order of priority, number one is depositors, number two, general unsecured creditors, number three, subordinated debt, number four, stockholders. It does list dividend information, but I'm not gonna list all that, because most of it is spreadsheets. Lastly, the receivership termination. It says the FDIC as receiver for New Century Bank has taken all necessary actions to terminate the receivership estate. The receiver published a legal notice of intent to terminate the receivership in the Detroit Free Press on February 15th, 2005 So it's basically like three years after the fact. The receiver has made all dividend distributions required by law. Again, if it is not required by law, you're screwed. It also says effective March 25th, 2005, the receivership estate has been terminated, as it should be. The receiver discharged, as it should be. And the receivership estate ceased existence as a legal entity. So basically, this one's kind of odd. But we've seen something similar to this before in times past, where basically goes from a bank to the hockey puck being passed to the FDIC. But in this particular situation, another bank did not want to take it over. And I think that says a lot. Because if you think about just by the numbers that we listed off here, or that I listed off, excuse me.