Like numerous community banking institutions, principal road gets stung by loans it designed to designers and builders through the property growth, whenever home costs had been going nowhere but up
Principal road Bank of Forest Lake, certainly one of Minnesota’s biggest and earliest community banking institutions, has gotten a cease-and-desist purchase through the Federal Deposit Insurance Corp., alleging “hazardous lending and lax collection methods.”
Now, those loans are souring at an alarming price, and banking institutions that contain the loans are increasingly being bought by state and federal regulators to completely clean up their financing methods.
The FDIC claims Mainstreet operated with policies and methods that “jeopardize the security of the deposits.” The bank that is 105-year-old that has nine branches within the Twin Cities area, operated by having an extortionate amount of delinquent loans and would not keep a sufficient allowance for loan and rent losings, relating to a 23-page purchase, given Dec. 12 making general public Friday. In addition, Mainstreet’s board of directors ended up being cited for failing woefully to adequately supervise the lender. (more…)