New Frontier bank closes

April 12, 2009 – 11:48 am – No Comment

Without finding a buyer, Colorado based New Frontier bank closed. This is the second bank in Colorado to close just this year.

The FDIC was appointed as a receiver of the bank and tried to find a buyer for it. When it was unable, a separate entity (Deposit Insurance National Bank of Greeley) was created to hold customers’ accounts for 30 days. The move by the FDIC is said to cost $670 million.

In January John Johnson from Johnson Dairy filed for Chapter 11 bankruptcy protection, he was one of the bank’s biggest customers. He claimed that the bank’s loan practices were what sent him into bankruptcy. Of course, bank officials dismissed the claim.

The FDIC insurers all deposits up to $250,000. About $4 million in deposits in the New Frontier bank may exceed the limit and those customers need to call (800) 830-4705 to get more information about their deposits.