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MB Financial's Plans for Corus Bank Deposits

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According to this Chicago Tribune article MB Financial Bank doesn't appear to have much desire to keep out-of-market deposits that it assumed from the failed Corus Bank. On Friday Corus Bank was closed by the OCC, and the FDIC arranged for MB Financial Bank to assume all of Corus Bank's deposits (see post). At least MB Financial agreed to assume all deposits even those above the FDIC limit. However, they did not agree to maintain rates on existing Corus Bank CDs and money market accounts. The FDIC allows the assuming banks to close CDs or to lower rates on existing CDs. However, if they lower rates, they must allow penalty-free early withdrawals.

From the article it appears MB Financial has decided to close CDs and lower money market rates for Corus Bank customers outside of Illinois. Here are a few excerpts from the Chicago Tribune article:
Non-Illinois residents supplied more than half of Corus' retail deposits, attracted to above-average interest rates that were promoted over the Internet and among the highest in the nation.

Of Corus' $6.6 billion in deposits, about $1.6 billion are considered core by MB.

About $3.2 billion of out-of-market certificates of deposit will be redeemed immediately, MB said.

An additional $300 million of out-of-market money-market funds will be re-priced immediately to current market rates.

And about $1.5 billion of high-rate deposits will be run off over time, probably before year end, MB said.

MB Financial has a FAQ for Corus Bank customers at the bottom right of its front page. As of 9/14/09, this is the same FAQ they had on Friday which just says that they "are reviewing bank products and interest plans," and that they will "let your know if anything will change on any deposit account you had with Corus Bank." So if you had Corus deposit accounts, you should be receiving a letter soon. Please leave a comment when you find out what MB Financial decides for your specific accounts.
  Tags: Corus Bank, MB Financial Bank

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Comments
34 comments.
Comment #1 by Scott (anonymous) posted on
Scott
My last Corus CD matures 10/13/09 so really wont matter much to me. One good thing is things seem to be going smooth. This CD ACH's monthly interest to me on the 13th of every month. Saw this morning this was done.

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Comment #2 by Anonymous posted on
Anonymous
MB Financial had an investment conference call today re: their Corus takeover. It's interesting to hear their explanation of how they analyzed the geographic spread of the deposits and their take on whether or not to reset interest rates. Link to the audio file:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=117839&eventID=2437444
We all comment here from the consumers' pov. This shows the transaction from the bank's side.

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Comment #3 by Anonymous posted on
Anonymous
My 12-month Corus CD matured on 9/6 and I received the check in the mail on 9/12. Talk about fortunate timing...

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Comment #4 by Anonymous posted on
Anonymous
MB lowered the rate on MMA account to essentially 0% effective 9-15-09

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Comment #5 by scott (anonymous) posted on
scott
Where did you find info on MMA account? I have kept $10k in mine to avoid the $25 fee so wonder if that min is still required. Plan was to close it once my last CD matures anyways on 10/13

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Comment #6 by Anonymous posted on
Anonymous
To Scott re your comment question:

You can see the rate info on your account when you log-in to the Corus website to view your account. After you log-in, click on the account or click on "account activity". The account activity window will then open, then click on "view account information" link which is below the name of the account. The window that then opens has rate information about the account. My account is the Ultimate Money Market and the rate is now .005% which is 1/200 of 1%.

Their Ultimate MMA has a $10000 minimum or $20000 average balance requirement to avoid monthly $25 fee, and you lose all interest since last statement cycle when you close. So leave 1 cent in the account and withdraw everything else once you meet the $20000 average for the 31 days of this cycle. If you only had $10000 in since last cycle, withdraw every penny and close the account unless you are close to the next cycle date, in which case wait until the statement cycles to pull all out and close.

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Comment #7 by scott (anonymous) posted on
scott
Thanks, I was checking under the "View account information" Link but all it was showing was last APY earned. Noticed now it does show current rate. Funny because my UMA is showing a rate of 1.31%

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Comment #8 by Anonymous posted on
Anonymous
To Scott......update

This morning my Ultimate MMA is showing .05% which is a whopping 1/20 of 1% vs. yesterday's .005%.

My account showed 1.31% on Monday, just as yours did. It changed to .005% on Tuesday, and now is .05% on Wednesday.

It doesn't matter much. They don't want our accounts so the best thing for us to do is close the accounts.

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Comment #9 by Anonymous posted on
Anonymous
To Scott.....further update

I just spoke to Corus/MB customer service. They will close Ultimate MMA accounts now without incurring monthly service charge or interim interest forfeiture. They will send you a check for the balance including interim interest

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Comment #10 by Anonymous posted on
Anonymous
Many thanks to the anonymous poster that described the procedure for checking the MMA interest rate. My rate today (Thursday the 17th) shows 1.31%, probably because I live just 2 miles from one of their branches and bank there often. This is consistent with the Chicago Tribune article linked to by bankguy in which MB said they were going to liquidate CDs and reduce MMA interest for depositors living outside the local banking area.
They'll probably keep the rates up a bit higher locally than they normally would for a while because they don't want all their new local depositors leaving immediately.

The longer term outlook for MBs interest rates are pretty grim I'm afraid. They are a notoriously stingy bank when it comes to rates. For example MB is currently paying it's depositors 0.25% on their MMAs. The highest rate they currently pay is 4% on a rewards checking account but the maximum deposit to earn that rate is $10,000 which is considerably lower than the $20K - $25K that most rewards checking accounts pay on.

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Comment #11 by Anonymous posted on
Anonymous
4.0% CD LOWERED TO 0.05% ON 9/14 WITH NO NOTIFICATION.

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Comment #12 by CD Rates Blog (anonymous) posted on
CD Rates Blog
I found the percentages of what MB considered Core and non-Core interesting. The FDIC has been beating up on brokered funds and how they are costly. When are they going to start examining Web Promotions, Rate Listing Services, etc.? It would seem that for a troubled bank, they are just as costly.

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Comment #13 by scott (anonymous) posted on
scott
I'm in MA and my UMA is still showing 1.31%. Also checked my CD and it still shows 4.65%. Maybe they are not lowering since it matures in a few weeks

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Comment #14 by Anonymous posted on
Anonymous
Scott,
My CD matures on Oct. 8th and they changed my rate to .05% on Nov.14 I closed it yesterday. They should be required by law to notify the customer before they arbitrarily change the CD rates. Tom

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Comment #15 by scott (anonymous) posted on
scott
Tom,
How did you find out the change? Was it just by looking at "view account information" Want to make sure I'm not missing something

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Comment #16 by Mike (anonymous) posted on
Mike
Has anyone found that the rate listed at the "view account information" is different than the actual rate quoted when you talked to a bank rep?

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Comment #17 by Anonymous posted on
Anonymous
Scott,
I saw the interest rate change at "view account information" and in my "account activity" I saw an interest credit on 9-14-09. This wasn't my usual monthly interest posting. I figured that they had just ended my 4.55% CD rate. I called to confirm. Then I closed the account. Tom

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Comment #18 by Anonymous posted on
Anonymous
The reader who described MB as stingy with respect to rates wasn't kidding. My 1-yr. Corus CD
with a rate of 4.2% was to mature on 9/29/09. I was told today by a CSR that MB will be cashing me out on Monday. They've already ACH'ed my final monthly interest!

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Comment #19 by Anonymous posted on
Anonymous
According to MB's Corus Customer FAQ page, at page 2:

"Will my CD continue to earn the same interest rate?
We are reviewing bank products and interest plans, and
we will let you know if anything will change on any deposit
account you had with Corus Bank."

This clearly implies a CD holder will be notified prior to any changes. It would appear to me their statement is misleading and deceptive, designed to lull CD customers into a false sense of security, if MB is now in fact changing rate terms without such prenotification.

They further this in the right column of their website home page by stating:

"Attention former Corus CD customers: You will be receiving a communication shortly that will provide you information about your CD."

Again, if they are reducing CD rates absent notice not only does it not pass the "smell test", it likely crosses into fraud territory since they are practicing deception that benefits MB (having possession and use of customer term deposit funds) to the detriment of these CD holders, (who are neither receiving the benefit of the term rate they'd bargained for nor taking action to remove and redeploy their funds under the belief MB will, as promised, timely give notice of any changes).

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Comment #20 by Sally (anonymous) posted on
Sally
Called today, Sept 21, CSR told me all out of state deposits were being cashed out and sent by mail. Upon inquiring if I could get the funds ACH'd, wired or fed ex'd instead of using the USPS to get such a large chunk of money, she said, NO, no options. I asked if I could open a checking account, have the money txr'd to that, then write a check on it, again answer was "NO." No options. Letters allegedly went out Friday, informing people w/out of state CD's that this would happen, but I was told that lask week too, and to date haven't rec'd any correspondenc. Online, it appears that MB paid interest to 7/14/09, then changed their mind, and withdrew a part of the interest that was paid. When I asked why, the CSR explained that the FDIC told them they could do so.

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Comment #21 by Anonymous posted on
Anonymous
I closed my CD account on 9-16 and received my check today. If I hadnt have been actively searching for information, I still wouldnt know that MB reduced my rate from 4.55% to .05%. Sally, did they take back the interest for Sept. 12-14? If so, I lucked out by withdrawing my money early. I will say it again, they should be required to give customers notice before arbitrarily changing rates. And I agree with a previous poster who said that notice should be timely! Tom

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Comment #22 by Anonymous posted on
Anonymous
I understand why people are upset, but I don't think MB can be faulted. After all, they have taken on a lot of CD deposits paying above market rates, and no doubt incurred a fair administrative cost to make this takeover happen. They could've handled things better, but I can't imagine why they'd want to honor the original CD rate.

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Comment #23 by Mitch (anonymous) posted on
Mitch
To Anonymous at 3:44 on Sept. 21: The disgustingly stingy MB Bank has actually debited my outgoing principal on my now closed Corus CD. MB initially ACHed my monthly Corus interest and retroactively applied the .05% downward APR adjusment to recoup the "overpayment" made to me. Unbelievable.

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Comment #24 by Anonymous posted on
Anonymous
Mitch:
Unbelievable! How many days interest did they take back? Tom

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Comment #25 by Anonymous posted on
Anonymous
Tom: I believe the retroactive downward adjustment went back to the 11th, the day that MB took over. My account was closed yesterday. I saw from Corus' still functioning online account access that $3.67 was deducted from the principal amount that they will be snail-mailing me!! An abominable bank!

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Comment #26 by Anonymous posted on
Anonymous
Of course they, (MB), can be faulted. Making any CD rate adjustments without notice beforehand, as they had published they would give CD holders, is dishonest and unethical. Retroactive adjustments, (as poster Mitch described), even moreso. Sure, they had a right to cancel CDs they did not wish to continue with but any such cancellation should've been by immediate redemption of the funds with the term rate paid up to time of redemption. Had the FDIC closed Corus without selling to MB, it would've issued checks to insured depositors immediately with all interest earned at their term rate being paid up through date of closure. Corus CD depositors are already losing the rates they'd locked in months/years before but also expected to get chiseled out of an extra ten days or so of any interest whatsoever because MB chose to footdrag on redemptions? Dishonest and unethical, simple as that.

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Comment #27 by Anonymous posted on
Anonymous
I just got a letter from MB that they are closing ALL of my Corus CD's and mailing me a check. They reset the rate to 0.1% effective immediately. Amusingly, they wrote that they will waive the early redemption fee when they mail me my check.

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Comment #28 by Anonymous posted on
Anonymous
I have 4 laddered Corus CDs, got checks closing out 2 of them today. No letter or other communication... Rude!

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Comment #29 by Carol (anonymous) posted on
Carol
I received 10 checks in Saturday's mail, the proceeds from closing out all of my 91 year old mother's CD's, none of which was even close to expiring. No letter prior to receiving the checks, no letter with the checks. And I, too, was (mis)led by the Corus and MB web pages that all would continue smoothly, and that I would be notified of any changes. The FDIC info on bank failures and the smooth transfer of deposits is also misleading. I have other CD's with Corus, and am waiting for the other shoe to drop. (Yes, I'm "out of market", but that didn't matter when I made the deposits).

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Comment #30 by texas (anonymous) posted on
texas
My 89 year old mother had a $100,000 cd with Corus. The interest was ach into her checking at another bank every month. I knew nothing about FDIC taking over. I received a check from Corus on Saturday for $99,986.52. No explanation as to why it was not the full $100K. Just a check.
We live in Texas.

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Comment #31 by Neil (anonymous) posted on
Neil
And imagine my surprise too when I received a 6 figure CD check in the mail from Corus on Fri. 9/25. It kind of looked like a check in the envelope but thought it was SPAM at first. Hadn't heard about Corus going under. Nothing else, just a check. Signed into my account and found it zeroed out on that account and on another CD. No check for that one until today 9/28. TG the post office didn't lose these big checks. Also very annoyed at the interest rate rollback to 9/15 and when I made an emergency trip to deposit funds at a local current bank temporarily, I have up to 11 days of hold time for the checks to clear until I can deposit into a new CD I quickly opened with MetLife on Fri. at substantially lower interest rate than the Corus CDs. So all in all I'll lose about a month of current interest and many months of higher interest due to this fiasco. Don't know why the laws permit this sort of thing. Perhaps it's time to return to the mattress method of saving.

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Comment #32 by Anonymous posted on
Anonymous
I finally received the letter from MB telling me that they were reducing my CD interest rate (from 4.65%) to 0.05%, retroactive to the MB takeover of Corus, and will be closing my account. I also received my final Corus statement.

I received the letter and statement three days AFTER I received the check. This 6-figure check was sent with no letter, nor explanation of any sort. (Yes, they had to take back some interest they had already credited.)

My local bank held the funds from Friday until today, Tuesday. Looks like H&R Block bank is going to get a chunk of money -- 2% for 6 months ... woo-hoo!

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Comment #33 by Anonymous posted on
Anonymous
I received a letter today from MB Finnacial stating that my CD's would earn .05% interest effective on Sept. 12, 2009 and in addition they are closing my account and sending a check. Today is Sept. 29 and the letter is dated Sept. 18; is it resonable to think the USPS would take eleven days to deliver this letter? And I have still not received the check. In affect, MB Financial will be in possesion of my money, and many other people's, for at least eighteen days without paying interest or notifying the CD holder. This appears to be unethical and a fraudelent representation of their statement that account holders would be notified of any changes in their account status. Do we have any recourse?

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Comment #34 by Jeanne (anonymous) posted on
Jeanne
We received 3 checks for the proceeds of our CD's. This was one day before the MB form letters arrived that stated that the new bank was taking over Corus' operations! The checks were $18.08, $17.92, and $6.13 short of the principal amount.

Where's the rest of my money??

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