Federal Deposit
Insurance Corporation

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   [¶11,712] In the Matter of Highland Community Bank, Chicago, Illinois, Docket No. 99-125oa (5-16-00)

   Applicant's books and records were and are so incomplete and inaccurate the FDIC is unable to determine the financial condition of the Applicant. Therefore, approval of Applicant's application to establish a branch office is suspended.

In the Matter of
HIGHLAND COMMUNITY BANK
CHICAGO, ILLINOIS
(Insured State Nonmember Bank)

ORDER SUSPENDING APPROVAL OF BRANCH

FDIC-99-125oa

   WHEREAS, on or about July 19, 1999, Highland Community Bank, Chicago, Illinois ("Applicant"), filed an application with the Chicago Regional Office of the Federal Deposit Insurance Corporation ("FDIC"), requesting permission to establish a new branch located in Terminal #2 at O'Hare International Airport, Chicago, Illinois; and

   WHEREAS, in meetings with the FDIC's Chicago Regional Office, representatives of the Applicant indicated that the purpose of the new branch at Terminal #2 at O'Hare International Airport was to allow the Applicant to enter into new lines of business, specifically, to provide cash services to various retail businesses, concession vendors and parking lot vendors located at O'Hare International Airport; and

   WHEREAS, the FDIC's Chicago Regional Office reviewed and analyzed the application using the factors set forth in section 6 of the Federal Deposit Insurance Act, 12 U.S.C. §   1816; and

   WHEREAS, on August 9, 1999, the FDIC's Chicago Regional Office approved the Applicant's application to establish a branch at Terminal #2 at O'Hare International Airport, Chicago, Illinois; and
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   WHEREAS, during the FDIC's examination of the Applicant, which began on September 20, 1999, the FDIC learned that the Applicant's books and records were significantly out of balance such that the Applicant's books and records are so incomplete or inaccurate that the FDIC is unable to determine the financial condition of Applicant; and

   WHEREAS, during the FDIC's September 1999 examination, the FDIC learned that the Applicant's books and records have been out of balance since February of 1999, and that the Applicant's day-to-day transactions increase the number of items causing the Applicant's books to be out of balance; and

   WHEREAS, on November 8, 1999, pursuant to section 303.11(g)(1)(i) of the FDIC's Rules and Regulations, 12 C.F.R. §   303.11(g)(1)(i), the FDIC has determined that there were material omissions relating to the Bank's condition and/or material changes in circumstances that occurred prior to the establishment of the new branch at Terminal #2 at O'Hare International Airport, specifically, that there are significant deficiencies in the Applicant's data processing and information systems causing the Applicant's books and records to be so incomplete or inaccurate that the FDIC is unable to determine the financial condition of the Applicant; and

   WHEREAS, on November 8, 1999, pursuant to section 303.11(g)(2)(ii) of the FDIC's Rules and Regulations, 12 C.F.R. §   303.11(g)(2)(ii), the FDIC determined that it was necessary to reevaluate the impact of the change in circumstance prior to the establishment of the branch at Terminal #2 at O'Hare International Airport and determined that the establishment of the new branch at Terminal #2 at O'Hare International Airport may pose a threat to the interests of the Applicant's depositors or may threaten to impair public confidence in the Applicant; and

   WHEREAS, on November 24, 1999, and based upon the foregoing determinations, the FDIC issued a temporary order suspending its approval of Applicant's application for approval to establishment a branch at Terminal #2 at O'Hare International Airport, Chicago, Illinois; and

   WHEREAS, the FDIC has reviewed and considered the information submitted by the Applicant by letters dated December 2, 1999, and December 6, 1999; and

   WHEREAS, the Applicant did not request a hearing pursuant to section 303.11(g)(3)(ii) of the FDIC's Rules and Regulations, 12 C.F.R. §   303.11(g)(3)(ii); and

   WHEREAS, despite the fact that the Bank indicated in its December 2, 1999, and December 6, 1999, submissions that the Bank had made significant progress in reconciling its books and records, the evidence available to the FDIC indicates that the Bank's books and records were and continue to be significantly out of balance and the Applicant's books and records were and are so incomplete and inaccurate that the FDIC is unable to determine the financial condition of the Applicant; and

   WHEREAS, after a review of the information submitted by the Applicant by letters dated December 2, 1999, and December 6, 1999, and other information available to the FDIC, the FDIC has determined pursuant to section 303.11(g)(1) of the FDIC's Rules and Regulations, 12 C.F.R. §   303.11(g)(1), that there were material omissions relating to the Bank's condition and/or material changes in circumstances that occurred prior to the establishment of the new branch at Terminal #2 at O'Hare International Airport, specifically, that the Applicant's books and records were and are significantly out of balance and Applicant's books and records were and are so incomplete or inaccurate that the FDIC is unable to determine the financial condition of the Applicant.

   After consideration and resolution, IT IS HEREBY ORDERED, that, pursuant to section 303.11(g)(1) of the FDIC's Rules and Regulations, 12 C.F.R. §   303.11(g)(1), the approval of the Applicant's application to establish a branch be, and hereby is, SUSPENDED.

   IT IS FURTHER ORDERED that the effective date of this ORDER SUSPENDING APPROVAL be, and hereby is, effective immediately upon issuance.

   The provisions of this ORDER SUSPENDING APPROVAL OF BRANCH shall become effective as set forth above and shall remain in effect until terminated by the FDIC.

   Pursuant to delegated authority.