N.Y. Chinatown Bank Closed for ‘Irregularities’

Federal Deposit Insurance Corp. officials said Sunday that the Golden Pacific National Bank, a major bank in the Chinatown community, is being liquidated because of evidence of “banking irregularities.”

As dozens of FDIC officials pored over bank records for a second day, depositors clutching bank books paced nervously outside the institution’s bolted doors, trying to get some information on the fate of their savings.

A police line was set up outside the bank’s main branch, where pages of Chinese newspapers were pasted to the ground-floor windows beside lion statues guarding the entrance.

Capital Wiped Out

“There were losses sufficient to wipe out the bank’s capital,” FDIC spokesman Alan Whitney said at a news conference at the bank.

Deposits totaled $148.5 million, Whitney said, adding that the bank was closed because of “sufficient evidence of banking irregularities.”

“The state of the bank’s records” made liquidation mandatory, Whitney said without elaborating on the reasons for the bank’s closure late Friday by the U.S. comptroller of the currency.

Will Seek Injunction

Hwa-Min Hsu, a lawyer for depositors, said that he would seek an injunction against closing the bank, adding that “99%” of the bank’s depositors were ethnic Chinese, mostly “working-class Chinatown residents.”

Whitney said that “insured deposits” of up to $100,000 would be covered as regulated by the Federal Deposit Insurance Act.

He said that it would take another “couple of days” for authorities to complete a survey of the bank’s accounts, but when the process is complete, “the money will be given back. The idea is to release the funds as quickly as possible.” He would not specify the date.