Bloomberg News
WASHINGTON — The Federal Deposit Insurance Corp.’s Office of Inspector General found lax lending and poor risk management led to the downfall of Citizens Bank in Sac City, Iowa, in November 2023 and its $14.8 million hit to the Deposit Insurance Fund.
As early as 2014, the report says the $65 million-asset bank — 100%-owned by the family of Thomas Lange, the bank’s chairman and president — made ill-informed commercial loans to trucking companies without adequate risk mitigation, board oversight or business expertise. Those loans were heavily strained as supply-chain snags during the pandemic imposed increased fuel, insurance and repair costs, making it increasingly hard for borrowers to repay.
“Citizens Bank compounded these issues by advancing additional funds to problem borrowers through overdrafts, often in excess of the state’s lending limit, and without first obtaining current financial information or conducting proper collateral analysis,” the OIG wrote….
