Failure Of Bank Causing Problems For Other Banks
SPOKANE, Wash. (AP) - The failure of the Bank of Whitman is causing problems for other banks in the Spokane area.
Recent court filings and public records disclose that RiverBank, of Spokane loaned large sums of money to employees of Bank of Whitman for stock purchases in the Colfax-based institution that federal and state regulators closed in early August.
The Spokesman-Review reported Tuesday that many of those loans are now in default. A state regulator considers such practices fairly common among some lenders, but a lawyer defending the Bank of Whitman employees against collection efforts calls the loan program a failed "scheme" that was designed to add shine to bank balance sheets and asset portfolios.
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