El Paseo Bank is the 17th bank failure in the country this year.
Federal regulators closed the bank Friday, but assuredNews Channel 3 and CBS Local 2Saturday no customers will lose any money.
The Federal Deposit Insurance Corporation or FDIC, took over the Palm Desert based lender when it no longer had the capitol to sustain itself and continue to operate.
The FDIC told News Channel 3 and CBS Local 2 Saturday afternoon Frontier Bank, which operates under the name El Paseo Bank, took significant losses in the real estate market and was not able to recover after customers couldn’t pay back home loans.
Bank of Southern California, based in San Diego, will now take over both branches of El Paseo bank. It’s buying the failed bank’s assets, estimated at about $86.4 million, and $82.1 million in deposits from the FDIC at a premium of 1.06 percent.
This means for customers, it will be business as usual come Monday morning.
“It won’t have any affect at all, it’s a seamless transaction so all customers can continue to bank as they have in the past, they can use their ATMs, their deposits will still be made at the bank,” said Eric Raines.
El Paseo Bank’s failure is expected to cost the federal deposit insurance fund $4.7 million.
The FDIC say if customers have any question they can call their call center 1-800-528-6215 or you can visit the bank’s website or visit a branch in person.
Beware of possible scammers, the new bank, or the FDIC will never contact you and ask for personal information.
For more information on Bank of Southern California, N.A., visitwww.banksocal.com.