End of World Causes Bank Failure
Numerous bad loans to a polygamist sect that believes the end of the world is nigh has caused the 99-year-old Bank of Ephraim in Utah to go under
. The Fundamentalist Church of Jesus Christ of Latter-day Saints (
a small Mormon sect
a small splinter sect of the Mormon church, unaffiliated with the main church) was spending money like the end of the world was around the corner... because they thought the end of the world actually was around the corner. And happily funding this spending spree was the Bank of Ephraim. They approved loans for one bizarre project after another: a watermelon farm that didn't grow watermelons, a construction company that made a loss on everything it sold (materials, labor). The bank liked giving loans to the end-of-world sect because the end-of-worlders readily agreed to outrageously high interest rates (Why not? If the world ends tomorrow you don't have to pay it back). I'm trying to imagine how the interview to assess credit worthiness might have gone:
-'So you're a member of a sect whose members have sworn an oath to borrow as much money as possible before the world ends and all financial markets collapse. Is that right?'
-'Sounds good. You're approved.'
I like the understatement of Utah Banking Supervisor Jim Thomas who simply notes that the bank got in too deep with sect members who "didn't have much to lose
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