The Next Step in Cleaning Up Colorado's Most Expensive Bank Failure

March 2010

Last April, federal regulators shut down New Frontier Bank---the costliest bank failure in Colorado history---with more than $1 billion in mostly delinquent loans. Since then, the Greeley bank's former owners and managers have found themselves under federal investigation for fraud, as state lawmakers explore ways to prevent banks from being so apparently reckless in the future. Now, more than $200 million in distressed loans that were on New Frontier's books are to be auctioned by the federal government in coming weeks, according to The Denver Post. There have been other sales, but these loans are the largest batch, bundled with a total of $610 million in other distressed notes from 18 other banks, such as IndyMac. The feds will also dispose of real estate and personal property, ranging from tour buses to palm trees, that once belonged to failed banks, reports BusinessWeek. "The FDIC is not trying to profit, merely limit losses to the deposit insurance fund," says Chris Whalen, managing director of Institutional Risk Analytics of Torrance, California, which specializes in credit and risk management.