Colonial, Alabama’s second-largest bank, is being closed by regulators today, the person said, becoming the largest U.S. bank failure of 2009 after an expansion into Florida saddled the lender with more than $1.7 billion in soured real-estate loans.Somehow I doubt it will remain the largest bank failure of the year, there's still four and a half months to go. As I said earlier this morning, there are still hundreds of banks in financial trouble.Colonial said last month there was “substantial doubt” it could survive and on Aug. 7 said its warehouse mortgage-lending business is the target of a U.S. criminal probe. The Securities and Exchange Commission issued subpoenas for documents related to accounting for loan loss reserves and participation in the Troubled Asset Relief Program, the bank said.
The forced consolidation of the financial industry continues. Big banks get bigger and take over branches. The toxic debt gets passed to taxpayers. The game of three-card monte continues.
There will be many, many more failures like this in the weeks and months ahead.
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