Broadway Bank: Findings, Context and Alexi Giannoulias

Plain-English summary

Illinois regulators closed Broadway Bank on April 23, 2010 and appointed the FDIC receiver. The bank was controlled by the Giannoulias family, and Alexi Giannoulias had worked there from 2002 through 2006 before becoming Illinois treasurer. ^{S027 — source: Illinois State Treasurer (opens in a new tab)S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)S040 — source: FDIC (opens in a new tab)}

The FDIC inspector general attributed the failure to aggressive growth in commercial real-estate and acquisition, development and construction lending without adequate risk controls; concentrated large and out-of-market loans; and heavy use of brokered deposits. The severe real-estate downturn made the losses worse. ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)} The report discusses the bank’s board and management collectively; it does not state that Giannoulias personally caused the failure or approved a particular disputed loan.

The OIG’s $390.2 million figure was an estimate of loss to the Deposit Insurance Fund, not a verified final net receivership loss. FDIC says the fund consists of premiums paid by insured banks and interest on Treasury securities; FDIC receives no congressional appropriations, and its depositor guidance says no federal or state tax revenues are used to pay insured depositors. ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)S076 — source: FDIC (opens in a new tab)S194 — source: Federal Deposit Insurance Corporation (opens in a new tab)S195 — source: Federal Deposit Insurance Corporation (opens in a new tab)}

Chronology

What the FDIC review found

The bank’s board and management pursued an aggressive growth strategy centered on commercial real estate, including acquisition, development and construction lending, without sound credit-risk management. More than half of lending was outside the bank’s local market, and large borrower relationships made monitoring and losses more concentrated. ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)}

The bank used brokered deposits to fund rapid growth. That funding increased risk when asset quality and capital deteriorated. Collateralized-debt-obligation exposure added risk, but the review did not identify it as the primary cause. ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)}

Fifteen loans across ten borrower relationships generated $93.5 million in losses by March 31, 2010. ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)} The cited OIG report does not identify Giannoulias as the originator or approver of those fifteen loans.

The report also identified regulatory limitations. It said greater supervisory attention was warranted in 2008 and that a 2009 report and enforcement action could have been timelier, while concluding that the FDIC generally followed prompt-corrective-action requirements. ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)} The account therefore includes both the bank-management findings and the supervisory criticism.

Giannoulias’s role and the loan claims

During the 2010 Senate campaign, opponents said Giannoulias personally “made” loans to borrowers with criminal records. Reporting and later fact-checks established that Broadway Bank extended roughly $20 million in new loans to two such borrowers while he worked there. ^{S046 — source: FactCheck.org (opens in a new tab)S047 — source: PolitiFact (opens in a new tab)S127 — source: Chicago Tribune (opens in a new tab)} The cited records do not state who approved every loan.

Giannoulias said he was not on the loan committee, described much of his work as administrative and acknowledged inspecting some properties financed by the bank. ^{S046 — source: FactCheck.org (opens in a new tab)S047 — source: PolitiFact (opens in a new tab)} FactCheck.org and PolitiFact concluded that wording assigning the loans solely to him went beyond what the available evidence proved. ^{S046 — source: FactCheck.org (opens in a new tab)S047 — source: PolitiFact (opens in a new tab)}

Giannoulias separately said he accepted a share of responsibility for the bank’s overconcentration in commercial real estate while disputing that he alone made reckless loans or caused the failure. ^{S048 — source: FactCheck.org (opens in a new tab)} That response is not a regulator finding; it belongs alongside the institutional evidence.

Political-influence allegation

A separate FDIC inspector-general evaluation examined whether political influence delayed closure. The cited evaluation says its review did not find evidence that political or other inappropriate influence affected examinations, enforcement or the closure decision. ^{S041 — source: FDIC Office of Inspector General, Office of Evaluations (opens in a new tab)} It did identify administrative delays and said notice requiring a capital-restoration plan should have been more timely. That document-specific result does not establish a universal absence of influence or an absence of delay.

Litigation and disposition

The court’s January 2013 opinion lists nine defendants and describes allegations in the amended complaint; Giannoulias is not among those defendants. The allegations remained allegations. ^{S042 — source: U.S. District Court, Northern District of Illinois (opens in a new tab)} The official FDIC index confirms a Broadway Bank D&O settlement record dated December 9, 2015, but the agreement could not be opened during this review. This page therefore omits its amount, denial/no-admission language and other terms. ^{S044 — source: Federal Deposit Insurance Corporation (opens in a new tab)}

The cited evidence does not establish that the settlement was Giannoulias’s payment or that it adjudicated the complaint’s allegations. His absence from that case’s defendant list does not resolve every criticism about his earlier role.

What is established, alleged and unresolved

Primary documents

• FDIC OIG Material Loss Review of Broadway Bank, MLR-11-004 ^{S039 — source: FDIC Office of Inspector General, Office of Material Loss Reviews (opens in a new tab)}
• FDIC failed-bank and receivership page ^{S040 — source: FDIC (opens in a new tab)}
• FDIC OIG evaluation of closing timing and influence ^{S041 — source: FDIC Office of Inspector General, Office of Evaluations (opens in a new tab)}
• FDIC professional-liability settlement index ^{S044 — source: Federal Deposit Insurance Corporation (opens in a new tab)} — confirms a record only; the agreement terms were unavailable

Source note and revision history

Loss figures are estimates at different stages. This dossier uses the OIG’s $390.2 million estimate and does not assert a final net loss. Publisher articles remain supporting context; the OIG review controls the institutional-cause description.

Source review updated Aug. 2, 2026: later final-loss documentation and the full loan-approval record were not located through the cutoff.