New Frontier Bank, Greeley, Colorado has been closed by the State Bank Commissioner, by Order of the Banking Board of the Colorado Division of Banking which then appointed the Federal Deposit Insurance Corporation, or FDIC, as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Greeley which will remain open for approximately 30 days to allow depositors time to open accounts at other insured institutions.
At the time of closing, the receiver immediately transferred to the Deposit Insurance National Bank of Greeley (DINB) all insured deposits of New Frontier, except for brokered deposits, certificates of deposit (CDs) and individual retirement accounts (IRAs).
The receiver also transferred to the DINB all secured public unit deposits. Under the FDI Act, the FDIC may create a deposit insurance national bank to ensure that depositors have continued access to their insured funds where no other bank has agreed to assume the insured deposits.
Bank of the West, San Francisco, California, was contracted by the FDIC to provide operational management of the DINB. Banking activities, such as direct deposit and writing checks, ATM and debit cards, can continue normally for former customers of New Frontier during the 30-day transition period.
Brokered deposits, CDs and IRAs are not a part of this transaction. The FDIC will pay the brokered deposits directly to the brokers for the amount of their insured funds.
The FDIC said that it created the DINB to permit uninterrupted service for customers with checking and NOW accounts. This arrangement allows for uninterrupted direct deposits and automated payments from customers’ accounts and allows them time to find another institution with which to do business, the FDIC added.
