Simpson, Minnick question shut down of Idaho bank 

U.S. Reps. Mike Simpson and Walt Minnick expressed concern about the closure of the First Bank of Idaho last month and asked federal regulators if it was possible to reverse the decision in a letter May 7. The Federal Deposit Insurance Corp. shut down the Ketchum-based community bank on April 24 and later sold its assets and deposits to U.S. Bancorp.

Earlier in the month, the Office of Thrift Supervision sent a cease-and-desist order and gave the bank a deadline to raise its capital levels.

Simpson and Minnick wrote that they were concerned that the FDIC, OTS and Federal Reserve did not give the bank enough time to capitalize properly and took actions that reduced the bank’s liquidity even while the bank neared the end of negotiations with an investor.

“Not only have investors lost millions in personal investments, but many of the businesses that have banked with First Bank of Idaho for years have found their credit lines frozen,” the lawmakers wrote. “These businesses, which operate in a resort community, are currently in the slack season between the winter and summer recreational seasons and are struggling to stay open without access to credit.”

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