20th bank failure this year: 3rd in Georgia

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Groups of investors can now, buy failed banks. You do not have to be a bank to buy a Bank. This is a possible opportunity for a group of individuals to pick up a bank.

NEW YORK (CNNMoney.com) -- State regulators closed down Community Bank late Friday, making it the 20th bank to fail since IndyMac was taken over by federal regulators in mid-July, and the third bank to close down in Georgia.

The Loganville, Ga.- based bank was shuttered by the Georgia Department of Banking and Finance. The Federal Deposit Insurance Corporation (FDIC) took over the assets and Tappahannock, Va.-based Bank of Essex will assume all Community Bank's deposits.

Community Bank had total assets of $681 million and total deposits of $611.4 million as of mid-October.

Bank of Essex purchased $84.4 million of the failed bank's assets and paid the FDIC $3.2 million for the right to take over the failed bank's deposits. The FDIC will hold onto the remaining assets to disperse at a later time.

The Community Bank has four branches, which will all open on Monday, Nov. 24, as the Bank of Essex. Through the weekend, customers of the failed bank will be able to access their funds by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed and loan customers should continue to make their payments as usual.

The FDIC said that the cost of the acquisition would be between $200 million and $240 million, but as with other bank failures, the transaction was the least expensive resolution.

A bigger pool of bailout buyers
On Friday, the Office of the Comptroller of the Currency (OCC) broadened "the pool of potential buyers available to buy troubled institutions" by allowing groups of private investors, and not just other banks, to take over failed institutions.

Several investors, led by Hilltop Holdings Inc., became the first group to qualify under the new "shelf charter" by agreeing Friday to take over Ford Group Bank, a Texas regional firm. However, the OCC approval is still preliminary and final authorization will only come after all requirements are met within 18 months.

Banks have been struggling to keep afloat as choked borrowers have been unable to pay their loans back, especially mortgage payments.

The $700 billion bailout, signed into law in early October, was supposed to be used for buying up toxic mortgage debt from struggling financial institutions to free up lending. But last week, Treasury Secretary Henry Paulson said the funds would now be used for injecting capital directly into the banks.

Banks have also been criticized for not using the bailout cash to increase lending to consumers and businesses.

Banks and lawmakers went head to head over that very issue last week. Lawmakers say that banks need to use the funds to make credit more available to consumers and borrowers. Banks, however, said they were doing what they could to increase lending and to work with delinquent homeowners.

Bank bailout scorecard
The Treasury department has been dolling out capital to qualified banks. Monday, the government dispersed $33.56 billion to 21 banks in a second round of payments. The government previously distributed $125 billion to nine banks in the form of stock purchase programs