Chicago Area Bank Forced to Return $20 Million Dollars Over Interest Disputes

Sharee B.

A Chicago-based banking institution had received $20 million in local deposits from the local treasurer. The investment came after city officials created a program to pour additional money into overlooked areas that would benefit from the financial opportunities.

The nearly hundred-year-old institution was previously known as Illinois Federal Savings and Loan but had been purchased by businessman Papa Kwesi Nduom, who renamed it GN Bank. After operating under its new name for a few years, the institution became interested in receiving deposits from the city and local officials informed them of the process to be eligible for those funds.

However, not too long after the city made its deposit, the banking institution sought out additional funding from the state level and received $10 million in deposit funds, which was followed by a name change.

Over the years, county treasurers began looking into the bank's financial practices to discover that not only had GN Bank earned almost $300,000 in interest from the deposits, but was in such financial disarray that the officers couldn't keep up with payments.

Two years later, the bank returned the funds to the State of Illinois, citing their inability to pay rising interest costs. This decision was followed by a move to return the funds from the City of Chicago as well.

That same year, GN submitted another application to receive deposits from the city's program, which it planned to use the proceeds for creating loans for the purpose of marketing to moderate-income earners. Although the city did re-approve their depository rights, the bank has yet to accept any funds.

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