Amcore, Harris, other Illinois banks tapped TAF

By Becky Yerak
Posted Dec. 2, 2010 at 9:47 a.m.

Harris Bank on LaSalle Street. (Phil Velasquez/Chicago Tribune)

About two dozen Illinois banks, including failed Amcore Bank and the parent of foreign-owned Harris Bank, tapped a Federal Reserve program that increased the amount of liquidity available to lenders during the financial crisis.

The Fed’s Term Auction Facility was established in December 2007, shortly after the first signs of the financial crisis began appearing.

Under the new Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010, the Fed was required to make more details available on the more than 21,000 transactions in TAF and other programs intended to stabilize markets during the financial crisis, and to help get credit flowing again in hopes that the economy would recover and jobs would be created.

Initially, the Fed took steps to boost liquidity through the discount window. But the Fed said many banks were reluctant to borrow at the discount window out of fear that their borrowing would become known and would be interpreted as a sign of weakness. So the Fed created a program in which is auctioned short-term loans to banks “in generally sound financial condition.” The Fed said TAF enabled it to provide funds against a broader range of collateral than it could through the open market.

A Tribune review of the data dump on Wednesday shows that Rockford-based Amcore, which failed earlier this year, got about 10 TAF loans from May 2008 to October 2008 for amounts ranging from $15 million to $75 million. After it failed, Amcore was sold to Harris Bank, which is owned by Bank of Montreal, in a deal that included financial assistance from the Federal Deposit Insurance Corp.

Records show that Bank of Montreal also participated in TAF about a dozen times from December 2007 to May 2009, borrowing from $250 million to $1 billion.

Other local borrowers included: Cole Taylor Bank, about a dozen loans ranging from $35 million to $325 million; First Midwest Bank, 33 loans ranging from $50 million to $300 million; MB Financial, 16 loans ranging fromĀ  $50 million to $250 million; PrivateBancorp, six loans ranging from $200 million to $400 million; First Chicago Bank & Trust, five loans ranging from $25 million to $60 million; and Tinley Park-based Allegiance Community Bank, which made two borrowing of $5 million and $13 million, respectively.

Other Illinois banks participating in TAF included: American Chartered Bank, American Eagle Bank, Archer Bank, Chicago Community Bank, Citizens Community Bank, Community Bank of DuPage, Community First Bank, Edens Bank, First Commercial Bank, Metropolitan Bank & Trust, North Community Bank, Northwest Community Bank, Oswego Community Bank, Plaza Bank and Republic Bank.

The Fed said that the final TAF auction was held March 8, 2010, with credit extended under that auction maturing on April 8, 2010.

“All loans made under the facility were repaid in full, with interest, in accordance with the terms of the facility,” the Fed said Wednesday.

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  2. K. Palmer Dec. 3, 2010 at 9:06 a.m.

    MB Financial Bank looking for taxpayer help? Big surprise.