Former Chicago Church-Owned Bank to Shut Down After Losing Millions
A Chicago bank owned by megachurch pastor Bill Winston and some members of his 20,000-strong Living Word Christian Center was shut down by federal regulators late last Friday after hemorrhaging millions of dollars since its founding in 2008.
A Chicago Sun-Times report said the Federal Deposit Insurance Corp. sold the assets of the failed Covenant Bank located on the West Side of Chicago to Liberty Bank and Trust Co. of New Orleans. The purchasing bank will continue operating Covenant Bank's single office.
Account holders at the bank, who were insured up to a maximum of $250,000 per account, will also be protected by the sale. But the banks owners, which include members of the Living Word Christian Center, will take a hit. According to the report, many of them are people of "modest means" who invested a minimum of $1,000 each in the venture.
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The Christian Post contacted the church for comment on Wednesday but a representative at the church declined to speak on the matter. A letter from Winston, however, is posted on the homepage of the church's website addressing the closure.
"Over the last few years, we made every attempt to raise the additional money needed to meet the regulatory requirements for the bank. Unfortunately, the troubled economic times made it difficult for people to invest," said Winston, who is listed as chairman of the bank in the letter. "As I have shared many times, my vision for the bank was to provide an economic engine to help revitalize urban communities, such as Lawndale, by providing lending for small businesses, commercial development, and affordable housing, as well as education and financial literacy to local residents."
Winston further noted that he would be communicating directly with the bank's shareholders in an upcoming meeting. The megachurch pastor reportedly paid $3 million for the former Community Bank of Lawndale after preaching the need to put religious faith into practice by supporting revitalization of the Chicago's West Side.
The bank has been losing money almost since Winston purchased it and especially in the last few years. In 2012, until Sept. 30, Covenant Bank lost $2.2 million. The bank lost $1.2 million for the same nine-months in 2011. It was operating under regulatory orders to raise at least $3 million since June of 2011.
In his welcome letter on the church's website, Winston provides a laundry list of business ventures, including the bank that forms "a vision for building His Kingdom." These ventures also include a Christian academy, a business school, bookstores, clothing stores, a training center and the Forest Park Plaza.
"Our desire is that you will want to go after everything God has promised for you and everyone who believes. God is no respecter of persons. What He has done here at Living Word is His desire for the Church globally. And God is able to do "exceedingly, abundantly above all that we ask or think according to the power [faith] that worketh in us" (Ephesians 3:20)," he states in the welcome.
