Six Illinois Banks Close

Six Illinois banks were shuttered today as government regulators proposed new rules for private equity firms seeking to take over failed banks.

The banks closed in Illinois were: the John Warner Bank of Clinton; the First State Bank of Winchester, the Rock River Bank of Oregon.; the Elizabeth State Bank of Elizabeth; The First National Bank of Danville; and the Founders Bank of Worth.

The FDIC says the failure of the six Illinois banks, which are all controlled by one family, resulted primarily from losses on investments in risky instruments known as collateralized debt obligations and other loan losses.

The closings bring to 12 the number of Illinois banks closed this year.

All six closed banks will reopen Monday as branches of stronger banks that agreed to buy some or all of their assets.