Finance
‘Pig Butchered’ Bank Drew $21 Million From Federal Backstop Before Collapse
- Heartland failed after a flurry of borrowing, inspector finds
- Bank hadn’t tapped FHLB financing in previous three years
Heartland Tri-State Bank’s sudden use of FHLB financing in its final weeks was an abrupt turnabout.
Photographer: Aamir Qureshi/AFP/Getty ImagesThis article is for subscribers only.
A Kansas bank that failed last July after its chief executive officer allegedly siphoned off funds to buy cryptocurrency drew $21 million from the Federal Home Loan Bank System shortly before collapsing, according to a regulatory review.
Heartland Tri-State Bank’s sudden use of FHLB financing in its final weeks was an abrupt turnabout, the inspector general of the Federal Reserve and Consumer Financial Protection Bureau found in a Feb. 7 report. In the prior three years, the firm didn’t borrow anything from the US-backed system, which helps support home lending.